TMC the metals company Stock

Good afternoon, everyone, and thank you for participating in the Metals Company Second Quarter 2026 Corporate Update Conference Call. Joining us today are the Metals Company's Chairman and Chief Executive Officer, Gerard Barron; and Chief Financial Officer, Craig Shesky. Following their remarks, we will open the call for your questions.

Before we go further, I would like to turn the call over to the CFO, Craig Shesky, as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements and information about the use of non-GAAP measures. Craig, please go ahead.

Thanks, Olivia. Today, we are going to be going through a call where certain statements may be made by the company using forward-looking assumptions and based on management's beliefs and assumptions using information available at this time. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. The company's actual results may differ materially from those anticipated. And except as required by law, we undertake no obligation to update any forward-looking statement.

Our remarks today may also include non-GAAP financial measures. Additional details regarding these measures, including reconciliations to the most comparably -- comparable GAAP measures can be found in the slide deck being used with this call. And you're welcome to follow along with the slide deck posted on our website at investors.metals.co.

I will now turn the call over to our Chairman and CEO, Gerard Barron.

Thank you, Craig, and thanks to all of you for joining us today. Today, we'll provide an update on TMC USA's applications and the progress both projects are making under the U.S. regulatory regime. We'll also discuss how Allseas is advancing the first commercial collection system from engineering into procurement, a significant step forward, translating years of development and successful offshore testing into a commercial-scale operation.

We'll talk about the American deep seabed critical mineral supply chain from offshore nodule collection and transportation to processing and refining. And we'll provide some detail on some exciting new partnerships that have recently been announced and the potential for additional partnerships in the coming quarters. We will discuss recent developments at the ISA and ITLOS, revisit the economics of our resource and close with our liquidity and second quarter financial results.

I'll also spend some time on the progress being made in D.C. to support this industry. And as noted in our corporate update press release, the company is actively engaged in funding processes with multiple U.S. agencies named in President Trump's executive order regarding plans to build nodule processing and refining in the United States. And while these processes continue confidentially, the company does not currently intend to pursue other capital market transactions until such time as further updates are publicly released. And the company will provide more substantive detail at the appropriate time.

So let's begin with permitting, where NOAA is now advancing both TMC USA applications through important milestones. For USA-A, our consolidated application covers approximately 65,000 square kilometers and includes both an exploration license and a commercial recovery permit. NOAA's publication of that application in the Federal Register will bring the application into public view and begins the formal public comment process.

For USA-B, which covers approximately 122,000 square kilometers, NOAA is expected to soon publish its notice of intent to prepare an environmental impact statement, and this follows NOAA's certification of the application in May and will move USA-B into formal environmental review and public scoping. Together, these milestones, expected imminently, demonstrate the steady and transparent progress of 2 separate applications under established U.S. law.

This slide shows the remaining path to USA-A consolidated application. Such, since submission in January, NOAA has completed its substantial compliance and full compliance determinations and the application is expected to imminently be posted in the Federal Register. NOAA has advised that certification is now expected in October 2026, citing a delay caused due to administrative issues rather than any issue with our application.

So given that timing, we no longer believe a permit grant in the first quarter of 2027 is likely. But the bottom line is that even though NOAA is not moving as fast as we would like, we still do expect the permit well in advance of targeted vessel commissioning in the fourth quarter of 2027. Whether the permit arrives a few months before or a couple of quarters before should not affect our plans. The next steps include inter-agency review and certification, a notice of intent for the NEPA process, publication of a draft environmental impact statement and draft terms, conditions and restrictions and the required public comment periods before NOAA makes its final determination.

The rigor of this review is ultimately helpful to the permit's legal defensibility in the coming decades. It also helps ensure that there are no rubber stamps available for new applicants that have not completed anywhere near the same level of work as TMC, its subsidiaries and our world-class partners.

We are increasingly bringing together the capabilities required to move from resource development towards commercial production offshore, and that means combining TMC USA's resource, environmental and permitting work with proven collection technology, marine operations, vessels and specialized survey capabilities. Onshore, it means integrating process engineering, project development, smelting and refining expertise, product qualification and established commercial relationships across the metals value chain. And the objective is simply -- is not simply to develop one offshore system or one plant, it's to connect the pieces of an American deep seabed critical mineral supply chain from collection and transportation through processing, refining and delivery of metal products to customers.

But this opportunity extends well beyond a single offshore system or processing plant. We are working with both innovative American start-ups such as Mariana Minerals and established industry participants across shipbuilding, marine logistics, security, environmental monitoring, equipment, software-first plant execution, processing, refining and rare earth development. Over time, this will build a more integrated American supply chain, including U.S.-built autonomous vessels and specialized equipment, U.S. flagging and re-domiciling, nodule offtakes and domestic processing of both base metals and rare earth-bearing streams.

Our first-mover position gives us the ability to help shape that ecosystem and potentially serve other American operators as the nodule industry develops. One example is our new agreement with Eco Minerals, a U.S. exploration company advancing its own NOAA application. Under the mutual Master Services Agreement, Eco Minerals is expected to provide vessel charter, autonomous underwater vehicle equipment, marine survey and related offshore services to TMC, subject to availability.

The MMSA also contemplates attractive preferential pricing on vessel and AUV rates. In return, TMC will make available resource definition, environmental impact assessment and permitting services based on our roughly 15 years of work in the CCZ. The framework also supports potential joint third-party work and a campaign later this year, which we believe will increase resource certainty on those areas covered within our consolidated application.

Turning back to the offshore system. Our May agreement with Allseas establishes the framework to complete development, commissioning and operation of the first commercial nodule production system. The initial operating configuration is designed for a production capacity of 3 million wet tonnes of nodules per year and will include 2 collector vehicles and their launch and recovery systems, the riser system, the Hidden Gem production vessel and a transfer vessel. Allseas is expected to fund a significant portion of the preproduction development cost recoverable through production revenues, closely aligning both organizations around successful delivery and operation of the system.

And with the development and operating framework in place, the program is moving into procurement and subcontracting phase. Basic engineering is complete for the critical long-lead systems, including the riser, launch and recovery systems and the collector umbilical. The next packages cover the compressor spread, navigation equipment, riser handling equipment, the Derrick upgrade, storage and offloading systems.

Fabrication is expected to run from the fourth quarter of this year through to the third quarter of 2027, alongside preparations for installation. And during that period, the major components will be assembled, interfaces managed and tested and the integrated system prepared for offshore operations. So that work leads into installation and commissioning targeted for the fourth quarter of 2027, preparing the vessel and subsea production system for offshore operations.

And even before beginning production, our team and our partners are actively exploring ways to reduce operating costs offshore. In parallel, TMC is accelerating the integration of autonomous offshore logistics, an exploration framework, leveraging rapidly emerging USV and AUV technologies to enhance supply efficiency, expand situational awareness, enable continuous low-impact monitoring across the production areas and support ongoing resource definition.

Once the bulk carrier is fully loaded in the Clarion-Clipperton Zone and assuming we proceed with our domestic onshore plans, it would begin a roughly 3,800 nautical mile voyage to Brownsville, Texas. A typical shipment would carry approximately 60,000 tonnes of polymetallic nodules recovered from the sea floor. And after about 2,200 nautical miles at sea, the vessel reaches the Panama Canal, where it transits from the Pacific towards the Caribbean and the Gulf of Mexico. The Panama Canal is our base case, but water availability, vessel traffic and draft restrictions are all part of voyage planning. So we are also analyzing an alternative route around Cape Horn, which may be particularly attractive as the availability of autonomous vessels increases in the years ahead.

The final destination for the bulk carrier would be the Port of Brownsville, where we refer to the proposed site as Nodule City. TMC USA holds an exclusive right of negotiation over a lease option for land at the port. The location provides direct access to the Brownsville shipping channel and sufficient land to evaluate an integrated processing and refining ecosystem serving TMC USA and potentially other American operators. No investment decision has been made and any future capital commitment would remain contingent on U.S. government support. Meanwhile, in Japan, we continue to maintain our partnership with PAMCO to ensure that we retain optionality for our processing plants.

Site-specific feasibility work is a prerequisite for any potential U.S. government support, and that work is now well advanced. The Brownsville area under consideration covers 1,466 acres across 2 parcels, 735 acres on the shipping channel and an adjacent 731 acres. Pre-feasibility level engineering for potential 12 million tonne per annum industry park is nearing completion, and feasibility-level engineering for the first smelting stage is underway with Mariana Minerals' leadership. The engineering team is also testing the interfaces among the berth, ship uploaders, conveyors, stockpiles, processing facilities, utilities and supporting infrastructure, along with the material flows, constructability and opportunities to phase further development.

This rendering provides a closer look at how Nodule City site could bring together the individual elements of the onshore system together. A dedicated berth and ship unloading system would receive nodules from the bulk carriers and transfer them by conveyor to managed stockpiles. And from there, an integrated material handling network would provide a steady feed to the processing facilities.

The layout also illustrates the supporting infrastructure required around the core process, power, water utility, storage, internal roads and sufficient space to sequence construction and expand in phases over time. This remains a conceptual configuration that will continue to evolve through the feasibility process, but it demonstrates the scale and integration required to establish a commercial nodule processing and refining hub in the United States.

The equipment required for Nodule City is industrial in scale. The ship unloaders shown here would stand approximately 84 meters high, taller than a SpaceX Falcon 9, while the electric arc furnace building would be approximately 54 meters high. So these comparisons help illustrate why site selection, berth access, heavy transport, power, utilities and construction sequencing all need to be addressed early in the feasibility process.

Now shifting to the government front. It is crystal clear that this administration is 100% committed to reshoring critical mineral supply chains. The breadth of this support was on display again last week. On August 7, President Trump convened more than 200 executives, educators, investors at the State Department alongside Secretaries Rubio, Burgum and Lutnick. The roundtable included approximately $3 billion of new critical minerals and battery investment, expressly including recovery of polymetallic nodules from the deep seabed as well as more than $180 million for the U.S. mining workforce.

I was pleased to attend on behalf of TMC and President Trump again reiterated his administration's support for deep seabed mining. That whole-of-government participation reinforces the strategic importance of the industry we are building alongside our partners like Turner Caldwell of Mariana pictured here with me.

I'd now like to turn the call over to Craig to take you through the regulatory update, project economics and the financials.

Thank you, Gerard. And just to clarify one thing, too. Obviously, during that roundtable, there was no expressed investment for nodule collection. But as Gerard noted at the top of the call, multiple discussions are ongoing with multiple agencies named in the executive order. I just wanted to make that clarification.

Now turning to the U.S. front. Regarding its right to regulate seafloor mining in international waters, the United States recently reiterated the position it's held consistently for more than 4 decades. Because the United States is not a party to the Law of the Sea Convention, it does not consider itself bound by the convention's seabed mining rules administered through the International Seabed Authority. At both the UN and the ISA, U.S. representatives place responsible seabed mineral development as an economic and national security priority. And that clarity matters. It reinforces the legal and policy foundation for the pathway that TMC USA is pursuing under DSHMRA.

By contrast, the ISA again made only incremental progress on its mining code during its July session with no target date for completion. The council agreed to develop a road map toward another road map for adoption, an outcome that captures the institutional delay that the would-be regulator has faced. In fact, Nauru's Vice President, Lionel Aingimea, in Kingston, warns that a process can outlast its own purpose, drawing comparison to the endless litigation in Charles Dickens' Bleak House. But nevertheless, we continue to engage constructively with the ISA and to protect our rights as we advance all practical pathways available to us.

Now during the ISA's July session, China, Russia and Greenpeace supported an effort to seek an ITLOS advisory opinion targeting deep-sea mining outside the UNCLOS and ISA framework. The proposal was accompanied by calls for coordinated measures affecting companies, financiers, insurers and ports participating in the U.S. pathway. And that effort failed and also drew significant pushback from member states across Europe, Asia and the Pacific. They challenged it rightly as premature and politically driven, warning that it could isolate the United States while further distracting the ISA from its core responsibility, which is the completion of a mining code.

Now last month, the Seabed Disputes Chamber of ITLOS unanimously prescribed provisional measures, protecting NORI and TOML's rights to due process and fair treatment in their proceedings with the ISA. The chamber found a real and imminent risk of irreparable prejudice to those rights and required the ISA to act in accordance with the applicable legal framework, provide the information needed for a meaningful response and refrain from aggravating the disputes.

In the days that followed, the ISA Council approved a 5-year extension of NORI's exploration contract by consensus, and is by far the largest contributor to deep sea science in the Clarion-Clipperton Zone. NORI's record speaks for itself with 22 offshore research campaigns, 959 research days at sea, more than a petabyte of data and 41 peer-reviewed papers as reflected in this deck.

Now last August, just a quick reminder, we announced 2 major technical studies, PFS and an initial assessment. The PFS focused on our first production area and established the world's first reserves for a nodule project while also confirming the project's strong commercial case. The initial assessment extended across the other areas highlighted on the slide in royal blue.

Taken together, the $5.5 billion [ NPV ] from the PFS and the $18.1 billion NPV from the initial assessment imply a combined estimated resource NPV of $23.6 billion. Across the life of both projects on an undiscounted basis, the studies point to approximately $369 billion in revenue and more than $200 billion of EBITDA.

However, we must admit TMC stock has undoubtedly lagged this year. There are many reasons for this, but it's our responsibility as management to drive progress and reverse this dynamic. You can see on this slide, we believe one thing is very clear, our market cap is undervalued relative to the resource itself by any reasonable peer-based metric. So as we diligently move towards commercial recovery of this generational and transformational resource for the U.S., it is reasonable for us to expect that the equity markets should more appropriately value this company, and we're doing everything in our power to ensure that happens.

On to liquidity. Our liquidity, which is defined as cash plus borrowing capacity, stood at $143 million at June 30, 2026, including $44 million available from the Barron and ERAS undrawn credit facility.

Now a question that we've received from many investors, TMC did analyze the pending September 2026 expiration of the warrants from the initial 2020 go-public SPAC transaction, and our Board of Directors sought input from management, from our outside advisers and the views of many of our shareholders. And the conclusion was almost uniformly aligned to keep the expiration date for these warrants fixed for the terms of the original agreement, in part because any extension of the expiration date of the 15 million public warrants, which must be exercised in cash, would also require the extension of the 9.5 million private warrants, which may be cashless exercised and are unlikely to result in any incremental cash proceeds to the company while still diluting existing shareholders. And as a result, we're not going to pursue potential extension of these SPAC-related warrants.

On to the financials. In the second quarter of 2026, TMC reported a net loss of approximately $60.1 million or $0.14 per share compared to a net loss of $74.3 million or $0.20 per share for the same period in 2025. The net loss for the second quarter of 2026 include exploration and evaluation expenses of $56.1 million versus $10.5 million in Q2 2025, general and administrative expenses of $15.6 million versus $11.5 million in Q2 2025 and other items resulting in a gain of $11.6 million versus $52.3 million loss in Q2 2025.

Exploration and evaluation expenses increased by $45.6 million in the second quarter of 2026 compared to the same period in 2025, mainly due to $37.5 million (sic) [ $37.2 million ] of charges owed to Allseas recorded following the signing of a development and operating agreement in May. Of this amount, $34.8 million represents deferred costs that would only be payable upon a tonnage basis once production commences, while the remaining $2.4 million was settled in shares on July 2, 2026.

The remaining $8.4 million of the comparable quarter increase is due primarily to higher share-based compensation expenses and an increase in pre-feasibility study costs related to the expanded scope of the PFS refresh. This increase was partially offset by lower environmental costs as the scope of activities related to Campaign 8 was completed in the prior year.

G&A expenses in Q2 2026 were $15.6 million compared to $11.5 million in the comparative quarter due to an increase in share-based comp. Other nonoperating items that reduced the net loss in Q2 2026 included an $18.5 million gain resulting from shares issued by the Metals Royalty Company, TMCR, in relation to a finance offering, compensation expenses and royalty purchase at a price exceeding TMC's carrying value per share of its TMCR investment.

Net cash used in operating activities in Q2 2026 amounted to $20.1 million compared to $10.7 million in 2025. The increase in the outflow in Q2 2026 is mainly due to a timing difference as it includes $9 million of tax withholdings remitted to tax authorities for which the cash was received at the very end of March. If tax withholding payments are excluded, cash used in operations would have been just over $11 million, roughly in line with Q2 2025.

Free cash flow for Q2 2026 was negative $20.2 million compared to negative -- excuse me, negative $10.7 million in Q2 2025, also affected by the tax timing point discussed on this slide. Free cash flow is a non-GAAP measure, and I would point you to the non-GAAP reconciliation table included in the appendix of the slide deck.

Finally, on to the balance sheet. Our accounts payable and accrued liabilities balance at June 30, 2026, was $52.1 million and included $40.5 million owed to Allseas for various services provided, $36.1 million of which is due to be settled once the company is in production. We believe that our cash on hand will be sufficient to meet our working capital and capital expenditure commitments for at least the next 12 months from today.

And with that, I will turn it back over to the operator to take some questions.

[Operator Instructions] And our first question in the queue coming from the line of Heiko Ihle with H.C. Wainwright.

I assume you can hear me okay?

Yes, we can, Heiko.

That Master Services Agreement with Mariana Minerals for the processing part in Brownsville. Can you maybe give a bit of color of what exactly has been going on there by now? I mean, I know it's only been, what was that, 3 weeks. But I mean, how much money -- or what's the time line for spending money there, maybe on a quarter-by-quarter or half-year basis, something like that, how you see all this progressing? And maybe what we should use in our model and account for all of that?

Well, yes, let me take the first crack at that. While we've only signed the agreement in recent weeks, we've had a relationship with the principal of Mariana going back to 2018 when we met Turner and he worked at Tesla. And when he started Mariana, we were very keen to find a way of working together.

And so essentially, they've been working on this file for probably a year. And so far, it's been an investment on their side, not on our side. Of course, they are backed by some of the best names in Silicon Valley and have recently just raised $310 million. And we think of them as our owners team who will help us address the issues around permitting, address the issues around construction. And eventually, what Mariana would like is to also be operator of -- alongside us with the agreement because they bring a tremendous amount of expertise from the school of Elon. And Turner has assembled an amazing team of 250-plus very smart people.

And so we see them very much working as part of our owners team instead of TMC going to hire 50 or 100 people and eventually hundreds of people, we very much see Mariana working there. Now we are leading -- we are working with another leading engineering firm who've been doing a lot of work with us for the past 10 years.

And that we're entering into a new phase. And what Mariana will do is they'll run a pilot for us, which will basically allow us to test a lot of the flow sheets because if you look at the Mariana proposition, it's very much about software controls. It's very much about automation. It's very much about first principle thinking. And when I think about the mineral processing industry, America said goodbye to it over the last 50 years, right? They were very happy for it to go offshore to the developing world. And of course, at that time, you had countries like China who were going through their industrialization. They had millions of farmers they needed to keep busy. So they were very happy to take on new very manual industries.

But as we think about bringing those industries back to the United States, they're going to come back very different. They're going to come back with the benefit of automation. And of course, AI has been a tremendous assist. The timing of this could not be better because the tools available to us are just outstanding. And 5 years ago, it wouldn't have been the case. And Mariana are at the -- they're at the bleeding edge of this. They're attracting people that would go to Mariana or go to Anthropic or to some of the other LLM companies. And so they really are a partner we're very proud of.

So that's kind of how the relationship will form, and we'll certainly be keeping the market up to date as we progress those relationship -- that relationship into what that will mean from a financial perspective. But at the moment, the focus is very much on how can we get Brownsville up and running most economically in the fastest, short -- fastest time frame possible.

And just rather, Heiko, we can't provide any sort of quarter-by-quarter metric or even get into the specifics, but we're talking about a relatively modest initial cost in the single digit -- in mid-single-digit millions over the course of multiple quarters. This is a very useful down payment effectively to progress feasibility work that is going to be a prerequisite for government funding.

Yes, so it's necessary work that when TMC is looking and has been looking even going back a year plus at what our plans are, it's always work that we've contemplated and in our forecast, it is certainly something that we've always included as something that would be necessary to do in advance of that potential government funding. So I can't say much more beyond that other than we believe it is useful work, and we have the confidence that it's going to hopefully lead to a strong outcome.

No, that's a fair answer. A completely different question. Just conceptually, I mean, Metals Royalty Company, I know you can repurchase 75% of this royalty. The way I look at it, these guys are almost more like a partner than a royalty holder. I mean, we cover a number of royalty firms. And oftentimes, there is a bit of like you're our client or -- but this seems to be -- I don't want to say a partnership, but there seems to be very vested interest on both sides. Can you maybe give a bit of color of what might drive you to buy back some of that royalty?

And I assume a good part is obviously financial, but are there any other decision-making processes on your end given the longer-term impacts from all of this? And you presumably want to keep a broad base of stakeholders interested in moving all of this forward?

Yes. Look, why don't I take first crack at that, Craig. Firstly, it's proving to be a great business partnership. And Brian Paes-Braga, who leads that company has been a real supporter of our efforts over the last decade. And how we buy it back, of course, is by paying them a royalty because the royalties go towards the buyback.

And so from our perspective, we always envisage that we would buy back the component of the royalty that we could. And of course, we didn't ever want to just sell a royalty to someone. We wanted to sell a royalty where we had an economic interest in that royalty. And of course, we remain a large shareholder of that company. We're very supportive. You've seen the company in the press recently buying the iron ore royalty. And I know they have a very strong pipeline of forward-looking metals. And I'm confident that Brian can build that into a super valuable company, and we'll be a key supporter of him, and it's a super positive relationship. But the buyback will happen naturally. As we pay the royalty, it will chip towards the repurchase price.

Our next question coming from the line of Tate Sullivan with Maxim Group.

Tate, sorry, we can just barely hear you.

All right. We'll go to the next in queue. Our next question in queue coming from the line of Dmitry Silversteyn with Water Tower Research.

Curious about the Eco Minerals deal and agreement. You talked about contemplating a joint campaign later this year into the CCZ. Would that be to your zone or to Eco zone or which of your zones, I guess?

Yes, it will go to both, actually. But on our area, we -- for those that have followed us, you know that there's been a lot of exploration and resource definition work in an area we used to know as NORI-D and we still do. And of course, the USA-A application for a commercial recovery permit still has some areas that we've got a baseline set of data on, but we'd like to move -- get a little bit more because the plan is to move our reserve number up significantly, and that just requires a little bit more survey work.

And of course, some of our resource we've already moved into the measured category, inferred, indicated, measured and now -- and then some of it went into reserve. And we plan to do that with a greater footprint now with greater tonnages. And then while we're out there, providing they get the permission to do so, they'll do a bit of work on -- potentially on some of the ground.

Okay. Okay. Understood. And then just, I guess, getting a little bit more clarification on how the government support or what the government support may look like and when it may come in. You talked about needing to finish some of the feasibility work to -- before you can even consider that. But can you help us understand sort of what the government is potentially looking at underwriting when they look at you? Is it -- is the objective is to kind of support your first production efforts? Or are they looking kind of more strategically as establishing a much larger processing hub for U.S. seabed operations beyond yours or beyond your zone of collection?

Yes. Well, we've got to be very delicate in what we say here, Dmitry, that it's well documented that the -- this administration wants to take a leadership role when it comes to deep-sea minerals. And I guess what we highlighted to them is that there's nowhere in the U.S. where you can process these materials. You have to send them to Asia and the Asian options are pretty limited. There's either Japan. And of course, we have a relationship with PAMCO in Japan, or there's Indonesia, but a lot of the Indonesian processing partnerships are either involving Chinese ownership or they operate to a different environmental and safety standard.

So we always said this was the moment to put on the ground some processing capacity in the U.S.A. because there's one reason why China dominates the critical mineral space. It's because they've had the benefit of freely available money from their government. They've been able to go and spend and move at a very rapid pace. Of course, they operate to a different environmental and a different safety standard than we will be forced to. And we certainly know that the environmental thresholds operating in America are some of the toughest anywhere. So I think people can feel very confident about the permitting process in the U.S.A.

So what the U.S.A. administration and the White House did was they bought into that. And so we are continuing discussions with several of those agencies about helping us with that ability to bring nodules to the U.S.A. for processing.

Yes. And Dmitry, you categorized it as is it just initial production or is it beyond a couple of points just there. Let's just say, if you're thinking about 3 million tonnes per year, which is the target capacity for the Hidden Gem, that alone if processed domestically, depending on whose model you're looking at, could satisfy somewhere from 1/4 to maybe 1/3 of domestic needs based on current demand for nickel and cobalt.

So even that "initial" production is meaningful. One of the things that would separate a place like Nodule City is the scalability because as you know, having to locate processing and refining capabilities near an ore body is a challenge for land-based mining that ultimately can limit how scalable a resource can be. This is a situation where we are pursuing negotiations on a lease option for an area that can allow that scalability.

So yes, you don't want to bite off more than you can chew. But even starting, let's say, the 3 million tonnes from the Hidden Gem alone is a significant portion of U.S. demand. But that scalability is something that this resource can uniquely offer.

[Operator Instructions] We have Tate Sullivan from Maxim Group back in the queue.

I hope you can hear me okay. Now Gerard, based on your public information sources, have you seen any or heard any recent announcements from China government about offshore mining activity or announcements from China companies, if you have heard or seen anything, please?

Well, nothing I'll cite on this call, but we have seen some of the press publish activity trackers on some of the deep-sea survey vessels and some of the deep-sea mining contractors have been busy in the area. So we know that it remains a priority for them. We know that they are pushing the ISA very hard. And I think it's safe to say they were quite frustrated with the pace of progress being demonstrated down in Kingston, Jamaica. But beyond that, I don't have a lot to share on this call. But I think if you go looking for those media reports on those survey vessels, it was staggering even to us to see just how active [ China ] is in looking for seafloor resources and doing so-called benign survey work.

And shifting to Allseas, and you had a great -- a lot of great updates in your comments, and you've worked with them, Allseas, many years. Do you have an exclusive offshore mining arrangement with Allseas? Or can they work with other companies? Can you remind us on how that arrangement works?

Yes. No, it's exclusive. The only time it becomes nonexclusive is if they wanted to offer -- put another system in the water and we declined. Now then they would have the right to go and offer it to someone else. And of course, we want to have lots of systems in the water. So the likelihood that, that would happen is very, very low.

And Craig, you also mentioned that the share award or share agreement with Allseas that settled right at the end of the quarter, so that will be in your Q, just to verify.

That's correct. That's correct. That will be included in the share count on the cover of the Q.

Okay. And then going forward, just in terms of the costs related to the vessel construction, do you feel you accrued for all those costs going forward? Or will that be on a quarterly basis, some capital call or some call expenses to Allseas for the construction of the vessel?

Well, look, there's been continued work by our partner, Allseas, with respect to project management, engineering, layup. And as a good partner, they've been happy to take some of that payment in shares. But we -- over the last few quarters, you would have seen us continue to accrue for some of those charges. A lot of what we reported as of June 30, approximately half of the total amount at that time owed to Allseas is payable then upon commercial production beginning.

So yes, there will be additional amounts that TMC will continue to expect to pay for the development of the Hidden Gem-based collection system. And we provided some detail on that in our pre-feasibility study last year. But again, as we continue to sharpen our pencils with Allseas, we do expect we will come lower than that expected offshore development number. But no, what we've accrued for is not the totality of what we're expecting to spend preproduction with Allseas. But again, they've continued to be a great partner to work with us and be flexible and also will be funding a large portion of the preproduction development costs.

And last for me on that. Have you shared or can you share where that vessel construction will take place or not disclosed at this time?

No, we haven't disclosed it at this time.

Okay. And thank you for updates on when the fabrication is planned for, starting in fourth quarter.

Olivia, are there any other questions on the phone line?

I'm showing no further questions in the Q&A queue at this time.

Great. I do see a handful of questions in the web chat, but I think most of them have been answered or things that we've not wanted to comment on further. So Gerard, I might turn it back over to you for some closing comments.

Well, firstly, thank you for those people attending today. Special thanks to our shareholders, to our team, to our partners, to our Board who've all been providing great guidance through this important year. So we look forward to keeping you updated as we have exciting developments going forward. I think it's going to be a super run into the end of 2026. Thank you all.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Hello. This is Craig Brelsford with RedChip Companies. Thank you for joining today's event with The Metals Company, which trades on the NASDAQ under the ticker, TMC.

Joining us today is Craig Shesky, Chief Financial Officer of The Metals Company. We will begin with a brief presentation in a moment and then we'll open this event to your questions. Welcome to everyone joining us today on X, YouTube, LinkedIn and other social media platforms. [Operator Instructions]

Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. Craig, please go right [indiscernible].

Thanks, Craig. Appreciate it, and thanks, everybody, for joining, especially with the World Cup semifinal going on. Despite that, I've seen a pretty great list of questions that has already come through, through RedChip, and I see the Q&A populating on the Zoom chat as well. So I'm going to keep my prepared remarks as brief as possible so we can get through as much as we can.

Just kind of a high-level overview. Look, if you're investing in TMC stock, thank you. We appreciate it. We know that it's been pretty rough so far this year, not just for TMC, but for others in this space. But for us, it's really an interesting opportunity as we look to some of the catalysts that are coming ahead. Some things, frankly, are taking longer than we would like, but we're about a month into this summer and we are head down on this project pushing forward and very excited about what comes ahead. I would say, if anybody is joining with the expectation of breaking news or new headlines, that's not what this is about. This is a webinar to give an opportunity to many of our retail holders to ask questions. We do a few dozen events like this, conferences, webinars. I saw a few of you actually at the Benchmark Conference in D.C. last month. I'll be seeing more people and institutional investors in New York for the Maxim conference, H.C. Wainwright. And for the first time ever, the Morgan Stanley Industrials Conference coming up in September. But there's a good chance for us to answer questions but also perhaps get some new investors across the story who may not be familiar with it. So again, we'll be reporting second week of August. So stay tuned for that and please join as well. But this is a good opportunity for us to address as much as we can. And thanks, everybody, for joining.

I'll start with a short presentation. There is one bit of news to highlight. I know there has been quite a lot of talk over the last month or 2 about what's going on with the International Seabed Authority, what's going on with the International Tribunal of Law of the Sea. What is that all about? Bottom line, TMC has exclusive rights to very large areas of the Clarion-Clipperton zone. NORI and TOML our subsidiaries have exploration contracts through the International Seabed Authority. And then separately, TMC USA has priority right through applications made through NOAA under the U.S. process. Bottom line, we can't talk much about anything that's ongoing in terms of litigation, but it is worth noting that during the International Seabed Authority session occurring as we speak, there is now a draft decision in front of the council and a recommendation from the ISA's Legal and Technical Commission to approve the extension of our NORI exploration contract. So TMC, of course, is always looking to preserve our rights and ensure that corporate entities and rule of law are respected. So we're pretty happy with that outcome and look forward, hopefully, two more news on that front next week as the potential extension comes. It's also heartening to see that the United States continues to be very steadfast in support of this industry. The State Department has reiterated over and over again. And again, reiterated to the United Nations last month, that the U.S. is not bound by the UN Convention on the Law of the Sea and therefore, has every right to regulate its citizens and entities in the high seas. So the U.S. position on this is firm that they have the legal right to regulate contractors and companies. And in fact, that's why you've seen a lot of new capital flow into the space over the last 9 months plus, including new entrants to the space and others who I think are trying to catch up to what TMC has been doing, and that's a good thing. We don't want to be the only ones doing this. Of course, it was the executive order that led to this rush of investment within seafloor mining. And now we actually see more areas under application through the NOAA process that are under exploration contract through the International Seabed Authority. So more capital coming in, more potential for investors to potentially diversify risk. And it also gives the opportunity for a country like the U.S. to develop on onshore ecosystem for the processing and refining of polymetallic nodules. Now please be patient with me if you are a TMC investor and you know much of this already, but TMC at a glance, we've been around for a long time. This company has been around going back to when it was called DeepGreen for the last 15 years. And in fact, we've already spent over $700 million developing our commercial operations, and that includes resource definition. It includes our pre-feasibility study last year, which established for the first time ever, reserves per SEC S-K 1300 standards. It includes the testing alongside our partner, Allseas, of our commercial system and then, of course, in May of this year, the finalization of our commercial agreement, leading up to commercial production. It also includes 22 offshore research campaigns prior to our application to NOAA and really over 1 petabyte of data gathered. Even on the processing side, TMC has delivered many of the world's first in this space and now we're at the point where we feel we have a flow sheet and we have an opportunity to bring some of this processing prowess to the United States. And again, investment in the United States, of course, is going to be contingent, the delivery of some items from that executive order about 15 months ago with respect to potential government funding. And of course, us bringing something domestically is contingent on significant government support. So more on that ahead and more on that as we get to earnings in August.

On the permitting front, we've also seen the delivery from NOAA, the regulator who put in place be implementing regulations of the Deep Seabed Hard Minerals Resources Act back in 1980s and they delivered on their end of the executive order in January of this year to have a consolidated application process, which TMC took advantage of and is now moving through having reached full compliance on the USAA consolidated commercial recovery permit and exploration license application. So we continue to move through that process to bring these nodules up from the sea floor to the surface and then hopefully deliver them to the U.S. domestically for processing. Now of course, these metals are all critical, nickel, cobalt, copper and manganese. One of the things, frankly, that's been hanging on the share price in the last several months is the fact that nickel is off about 15% versus the highs this year. Some of that has to do with policy changes in Indonesia. Bottom line, this is why you want to have a basket commodity approach while you don't want to be dependent on any 1 or 2 metals for your economic return. TMC, of course, it can deliver mineral security to the United States and metals where the U.S. is truly dependent on foreign sources, many sources controlled by China through their investment in countries like Indonesia or elsewhere in Africa. What we can provide to the United States looks like based on 1 billion tons of polymetallic nodules, would equate to about 300 years of manganese, 200 years of cobalt and about 100 years of nickel supply. But importantly, it's the grade of that material that really stands out relative to other resource projects. It's the grade of all 4 of those metals that leads to the better economics for us and allows this to position us in the low first quartile of the nickel cost curve.

Now a few more slides, and then we'll kick it over to Q&A. As we noted in our Q1 call, we reached a commercial agreement with our partner Allseas and are working on this offshore system to get it ready for production. It's not something where we're waiting for the permit and then spending the money. Rather, we ended Q1 with a very significant amount of liquidity, over $160 million of liquidity, including an untapped credit facility and that allows us and Allseas to begin getting the system ready for commissioning in the fourth quarter of 2027. And suffice it to say, we and Allseas would not have the confidence to do that unless we felt we were on a very solid ground with the U.S. permitting process. So leading up to that installation and commissioning, of course, there's a lot of work that is ongoing in many of the long lead time items and engineering work on the system are already being kicked off.

On the onshore side, obviously, there have been a lot of actions in the critical mineral space. It's frankly hard to keep track. One thing that's probably interesting in the last day, you may have seen the Department of Wars, Office of Strategic Capital announced a new natural security fund finance program that can partner with private capital to make investments in the critical minerals space. So again, I'm sure a lot of folks are hoping for an update on the U.S. government front. Suffice it to say, everybody who is controlling the purse strings with the U.S. government and who has been directed to focus on seafloor resources by President Trump, they are focused on it. They're working their tails off. But many of these guys are coming in from the buy side and really, I think, doing a very good job. Of course, we would always like things to move quicker. But from our perspective, we're very pleased with where things are heading and also the attention that this resource in this company are still getting. Now in the site-specific feasibility study, of course, we are looking at Brownsville, Texas for the location of our first processing and refining facility, again, contingent on receiving government financial support because we do, of course, have toll processing options at existing facilities. But this is truly an opportunity. It's a window for the U.S. to extricate itself from that cycle of China dominating some of these metals and we've already kicked off much of the feasibility and engineering work, and you'll see some of the 3D models here of what we're looking to build on the Brownsville Ship Channel. In fact, trying to appreciate some of the scale. We put together a slide here just so you can get a sense of how large this electric arc furnace building might be, how large the ship unloading facility might be in the context of a SpaceX rocket or the Statue of Liberty. It is really a huge opportunity. It is a challenge, of course, and that is why cognizant of potential dilution to our shareholders, we want to first make sure that there is the majority of funding in place from non-dilutive sources prior to really starting to spend here. But we're very positive on where things are going. Of course always want things to happen quicker. But I think this might be a good time, Craig, to kick it over to our long list of Q&A and then maybe if we have time towards the end of the session, we can go through some of the Q&A that I see coming through on the Zoom channel.

Absolutely, Craig. [Operator Instructions]

We have dozens of questions for you, Craig. The stock has been weak, along with many other pre-production metal companies. What's going on in the sector? And how does it affect you day after day?

Well, I wake up every day thinking about that. And I'm personally very invested in this company as are most of our executives. And while it doesn't feel very good right now, we've seen darker days. We've fought through and funded this company through new strategic partners or through Board members or through executives of TMC. And now I feel we are on solid ground. We have a lot better research coverage. We've a lot better access to capital. I think what you should be noticing is the patience of TMC where despite the fact that we are a well-known seasoned issuer and we could be panicking and going out and raising funds, we're actually in a very strong cash position. We and our partner, Allseas know what we have to do to keep the project on track and get to our target date for commissioning. We also feel very good about where the permitting process is going. There have been a lot of factors over the last couple of months that haven't been very helpful. Of course, I mentioned earlier, the nickel price is going down. There was also a very large holder who had to [indiscernible] the position to free up some funds to participate in SpaceX IPO. There are things like that that are sometimes out of your control. What is in our control is doing events like this, talking to investors while a lot of people on the call might be very familiar with the TMC story, I've been at the Mines and Money Online Conference for the last couple of days. There's still a lot of smart money out there that doesn't know about this. So that's why you're going to see over the next couple of months, myself and Gerard pounding the pavement and getting in front of institutional investors. We still don't have the BlackRocks, the Fidelity's, the really deep pockets. And that's oftentimes leading up to commercial production where you see the inflection point of the stock. So everything is on track, controlling what we can control. But I'm sympathetic to the fact that the stock has been weak. It's our job as an executive team to create shareholder value. But it's also our job to recognize this is a multi-decade project. It's truly transformational. And what we're sitting on is a resource, if you're talking about the revenue potential is in the $1 trillion range. And if you're talking about just the NPV of our projects, it's close to $24 billion. So it doesn't feel good to be trading at a single-digit percent of that NPV. But I don't see anything standing in the way of us getting back to where we should be. So while it's been a rocky, it's been frustrating, no more frustrating than it's been for me and Gerard and the rest of our team, we see the path to get this back on track.

I'll be honest. My concern is politics. You're leaning heavily on the U.S. pathway and an executive order. What happens to this timeline of the makeup if Congress or the administration shifts after the midterm?

Honestly, the midterms aren't going to have much of an impact on it. I mean we are going through a NOAA process with the implementing regulations were put in place in late '80s. And this has been the law of the land in the States for several decades, whether it's a Democratic or Republican administration. So again, because we're going through the process the right way in a measured and transparent manner, and because there are public comment periods, there are checks. There's all of this review process that is required for a project of this size, it doesn't really matter where things shake out in Congress. Now obviously, down the road in 2029 and beyond, who knows what the political environment will be. But this is a situation where we feel once the permits in hand because we've gone through the process in the correct way, it makes it much more difficult for anybody who will inevitably try to challenge it. Any resource project domestically or most places around the world, will get legal challenges. And what really opens you up from a legal perspective is if you skipped over certain steps. And we certainly haven't done that. It's also often the case that when you have domestic projects, you might be in somebody's backyard or you might be close to the water table or near an endangered species. TMC, over 1,200 miles off the coast of San Diego in the NORI-D area, that creates an additional burden for anybody trying to have injunctive relief to prevent this from going forward. That's really what one is scared about in some of these resource projects. People try to get an injunction and delay and starve the project of capital. I think that's a very different situation than what would play out after the eventual NOAA program.

I'm a skeptic and I probably am not alone, you often hear this pitched as cleaner than opening a mine on land. What's the honest side-by-side on environmental impact?

Well, Craig, you said I'm a skeptic. I hope you're not a skeptic specifically, but I guess you're reading that question.

[ I'm reading ]. And I'm definitely reading what the person wrote.

I was like, man, I've lost Craig. No. I think to answer that question, you probably have to think about what impact should we be focused on? I would say, by any stretch. And look, I saw this particular question in advance. When you're saying what are the alternatives to the source of supply, they are not pretty. And there was actually a report in Nature a couple of months ago talking about the threats of nickel supply growing in tropical regions. This is the Sulawesi area in Indonesia. Take a step back and think of these impacts, where you're talking about a wastewater going directly into the ocean or rivers. You're talking about deforestation, you're talking about digging to get these lateral rights. And you're also talking about some of the largest carbon sinks on earth, allowing that carbon to release directly into the atmosphere. What TMC is up to is very different. You're picking up a loose resource without any digging or blasting your drilling. So I would say it's apples and oranges, but you can measure it. You can say, all right, let's stack up the impacts, what matters to us. If tailings matter to you, well, this produces no tailings. If you're talking about waste, this is a much, much smaller potential waste stream. And even on carbon content, Benchmark Minerals put out a study several years ago noting we could have about a 94% reduction in the carbon emission equivalents per ton of nickel produced here versus the type of environment I just showed in Sulawesi, Indonesia. So I understand people are skeptics. What I would say is to looks at the environmental work that TMC and others have done, we alone out of the $700 million that has been spent since our inception, $250 million has been spent on the environmental research. The data is there. And if people want to make informed decisions as opposed to knee-jerk emotional reactions, the data is available. The good news is what truly matters is that the regulator NOAA sees that data. And we, of course, have been providing that information to them, and it's building upon some of the work that they did back in the '70s and '80s, which again confirmed nodule collection should go forward.

And here's a positive take. One thing I like, he writes, is that you've got 4 metals in 1 rock rather than betting on a single commodity. How much does that actually cushion you if that metal, nickel, like you mentioned in your presentation, would stay soft for a while longer?

It helps. I mean nickel would be the most important metal. It feels like it's now kind of got a new floor north of $16,000 a ton. I was a former commodity analyst at a hedge fund. I can tell you, I've been wrong just as often as I've been right in terms of where these metals are going. But you've seen copper prices continue to be very strong over the course of this year. So that obviously helps mitigate the impact. I think what one should keep in mind is that typically, when you are providing capital to a new project on land, whether it's greenfield or brownfield, you might get a permit and then you start building and then the price of the commodity goes down 10% or 15%, you're just stuck and you can't be profitable. Here, you have a very large margin of safety given the fact that with 4 metals in 1 resource, you're in a first quartile cost position. So yes, if nickel prices go down, it does cut into profitability. If copper prices go up, it mitigates that and will help. So there are a lot of independently moving variables but I would rather be in the position where you do have that cushion. And I feel TMC does.

As you mentioned in your presentation, Craig, your studies point to a combined value in the billions and personally, I think you even said trillion possibly and you mentioned...

Revenue potential, revenue potential. I don't want to guide people down the wrong road.

Yes, yes, yes. Okay. Now -- and you'll agree that the stock is trading at a fraction of just about anything you were saying there. What do you think the market is missing, Craig, once again? And what has to happen for that gap to start closing?

Well, it's not just retail investors. I talked about this, but some institutions who have long positions in TMC. When things get a little rough, I get a lot more e-mails than I typically do. And oftentimes, there's the view where people look around and like, when they have to ask themselves, what am I missing that doesn't help the confidence? I think the answer is you're not missing anything. Do you think that TMC has the ability to get this permit, okay? If that's the case, then do we have the ability to execute on our plans and get the vessel on the water. Well, yes, I think between TMC and Allseas, we've proven that. And we've also shown over and over and over again, going back to what was a very difficult go public transaction late 2021. A lot of other teams could have just folded up shop and said, "Well, this is too hard." And we scraped and clawed through the dark days of 2022, '23, '24. So what are people missing? I think it's more -- a lot of people hear an idea like this and they dismiss it out of hand because it is a little bit different. It's an oil and gas offshore technology married with 4 metals, and you have to know the metal market but also know the tech between -- around offshore oil and gas, it's not for everybody. And on top of that, you have the regulatory environment, and it's easy to throw [ one's ] hands up and say, "Well, it's a quagmire, who knows." That's not the case. We have a clear legal path forward through NOAA and anybody wants to take the time to analyze it, I think, generally comes to the same conclusion. So I think what we're fighting against is not convincing people that have already heard the story, but getting more people to hear the story. And that's why we continue to be out there on the road over the coming months ahead, too, talking to investors and getting them across it. I -- over the last 3 days, I've met with a lot of huge funds who I was kind of surprised how little they knew about the space. And a lot of people might just say, "Well, the UN says one thing, the U.S. says the other, I can't make up my mind." If you actually dive a little bit deeper, you see how clear the permitting path really is.

On the processing side here in the United States and without getting into anything that you cannot share yet, how are you thinking about where and how this material eventually gets refined?

Well, what we'll say on that point is our plans domestically are contingent on government capital support. We're not a large issuer with a high credit rating, and we can just go out and have a term loan and some convertible debt, and we can put together a multibillion-dollar funding package on our own. That's not our game. We're focused on the resource definition. We're focused on the offshore work. And while we do have the expertise of the onshore processing and refining flow sheets, that capital is something that we are going to be very careful about how and when we raise it. This is why it's important to remember that there are toll processing options if necessary. That's not what our main focus is. And I think the reason we continue to be focused on progressing our work in Brownsville, Texas is because we feel very good about our prospects of getting some of that necessary support.

The Allseas agreement felt like a big step when it hit the wire. Can you talk about what that partnership actually gets you and how close the collection system is to being ready to go?

Yes. The collection system, I would say, is close to being ready to go but at a smaller scale. What we are investing in is the higher scale that eventually get us to ramp up to that 3 million tons per year, which requires the construction of larger collector vehicles and the implementation of a wider diameter riser pipe and a more powerful compressor spread, another launching recovery system, some solutions on the transfer vessel side. So all of these, I think, are -- even though they're challenging, but they're not anything outside of the capability of teams, your Allseas team. So I say the technology to do it has been well proven. Now it's a question of, all right, if you have this vacuum cleaner system at this size, what does it take to ramp it up to a larger scale? That's what we're focusing on, and that's where the dollars are going to be spent. The initial dollars are focused mainly on some of the longer lead time items. For example, the umbilical cord that connects the riser pipe to the collector vehicle. So we want to make sure that anything that does have a slightly longer lead time can be ordered in due course. But we and also feel very confident we have that in hand.

The consolidated application keeps getting described as a first of its kind. What does filing it that way actually get you compared with the old 2-step process?

Yes. Look, it's a good question. I mean I would like -- whether it's in 2-step process or the consolidated process to move quicker. But it does get you, I think, past the point where you're duplicating efforts. For example, in the previous process, there is expectations of -- on the exploration license side, an environmental impact statement for something we're doing basic resource definition and exploration work. What for TMC, it means is that we've already put together a lot of the key elements of the application from resource definition, mine planning and most importantly, the environmental research. So that's why TMC was the natural first mover to take advantage of the new consolidated process, but it's mainly about removing duplicative steps as opposed to jumping over any steps that may have been included in that sequential process.

The 65,000 square kilometer figure is hard to picture. Can you put the size of this resource in terms a regular investor can get his head around like how much nickel or copper, we're really talking about?

Sure. Well, the 65,000 square kilometers that has 619 million tons of nodules estimated on it, then also a few hundred million tons potentially of exploration upside because areas that are adjacent to the areas that we've already done quite a bit of resource definition work on. So it tends to be somewhat normally distributed. The nodules themselves have very similar metal characteristics. And then you can tell with a high degree of certainty through imaging and box core samples where the patches with the most nodules are. So we feel very good that this is a very, very large resource. In terms of 65,000 square kilometers, that's a little bit bigger than the state of Western Virginia or if you're familiar with New England, it would be basically Massachusetts and Vermont and New Hampshire put together. So it's a very large area. But let's say, throw out a number, 800 million tons of nodules. Well, I said earlier about 1 billion tons of nodules, if that were collected, will represent about 100 years of nickel. So this resource might represent 80 years of nickel for the United States. Are we going to pick up every rock? of course not. And in fact, in our pre-feasibility study, we assumed we pick up about 46% of the nodules on the ground. But that gives you a sense of scale. You're talking about this being measured in decades of supply. It's on a marginal solution. Another way to think about it is the nickel market now is a little over 4 million tons, producing 3 million tons per year in a ship, nickel 1.4%. There's moisture content to take out. Bottom line, each ship is nearly 1% of the global nickel market. And the nice thing about this resource is there's not a natural limiting factor on how many ships you put on the water. The limiting factor is availability of ships and availability of capital, but you can ramp up in a modular way offshore, which is very attractive.

The pushback on deep sea mining is loud and plenty of countries and groups are opposed, how do you answer critics who say we simply don't know enough about the deep ocean to start collecting down there.

I think we ignore them. We don't ignore their questions, but we ignore how loud their voices are. What matters to us is getting our permit and taking the research that we've done, putting it through peer-reviewed journals and that is already happening. So the data is there. You're not going to convince everybody. You're not going to be popular with everybody. We don't have to be. These are commodity markets. It's not a popularity contest. It's kind of similar to the nuclear industry where, yes, they had been early on, a very [ loud ] vocal critics who perhaps were missing in science and just saying the sky is falling. This is terrible. We know the data doesn't support that. And now you have some of the critics coming out and saying, nodules are radioactive. We put that to bed years ago, that about nodule radioactivity being somehow dangerous to humans. It's not. Now if you're going to be in the hold of the vessel, do you have to wear the proper personal protective equipment, just like you were dealing with any other bulk commodity resource? Sure, you don't want to be inhaling fines or dust from many of these resources. But it's all alarmism. What do we do for people that actually want to learn about the resource and look at the data. We share data openly with the world. And that's exactly what TMC has been doing, but a lot of them, you just have to ignore the noise.

With all the noise about China and critical minerals, help me understand where TMC actually fits in the supply chain conversation. Is this more a national security story, an EV story or both?

It's been an EV story. It's been a national security story. It's an infrastructure story. It's manufacturing. It's energy storage. It's all of it. These are commodities with a wide range of needs. So just picking one or the other, I think this is the point. These are commodities. They have a wide array of uses and all of them are deemed critical. So the EV side of it is not at all dead. In fact, high nickel batteries are going to be a key part of the equation for many decades to come. So that's due to the energy density of nickel. That's a chemical property that's not going to change. It happens to have very high energy density, which means you can have longer range on a single charge within a smaller format. But look, it's not anything where I'm going to predict what the EV market is going to be relative to the defense market. Nickel in particular, has a lot of uses for aerospace, missiles, electroplating. Copper has a lot of uses everywhere. It's nice to be hedged in this scenario. So rather than prognosticate on that, we're just keeping our head down and trying to push ahead to production.

You're pre-revenue with a large build still ahead, the cash position looks reasonable today, but how should shareholders think about what it takes to fund this through to production without heavy dilution.

I think we have the tools we need, I think we recognize that share price is low. We feel good about the cash on the balance sheet. We also feel good that we have the toolkit necessary to keep it on track and knowing that post permit grant, there would be probably a better opportunity to raise some of the incremental funds. So we're going to manage this very tightly with the dilution of mine. The market cap rate now is $1.8 billion (sic) [$1.80 billion]. That's way too low. At some point in the future, there might be an opportunity to raise funds and perhaps get some large quality institutions in. But again, we're in no hurry to do that. We feel very good about where things are headed and again, you're not going to see TMC just alter the market raising funds because we feel the stock is going down, we're panicking. No, we have a very good cash position right now. We also can ramp up or ramp down spending as and when needed. We're a pretty tight team with 50 people or less. So it's between us and Allseas to set the pace to some of the items we're ordering for that Hidden Gem vessel. We're going to manage that tightly always with potential dilution to shareholders in mind and avoid that as much as possible. And I think we've had a pretty good track record of doing that.

Craig, for someone who wants to keep tabs on the story between now and production, what are the handful of milestones you would tell them to watch for?

I would continue to watch for the step-by-step process of the NOAA permitting for our USAA area. I would, again, continue to watch for news on the potential Brownsville and the U.S. government front. Myself and Gerard continue to be very busy on that front. And then also take a look back at some of the catalysts from 2025. A lot of them were catalysts that were new names coming in, new strategics coming in, the likes of Korea Zinc, for example. There are a lot of other people that are seeing the opportunity in this space. So it's not something where I can lay out the playbook for you, but we feel very strongly that as we are getting closer and closer to production, you're seeing a lot of new entrants come into the space, along with that comes a new interest from major strategic and government parties.

If we are all back here a year from now, what's the one thing you hope you'll be able to tell this audience that you've pulled off?

I want to be able to show the funding package in place in a very efficient way for the Brownsville, Texas processing facility and I want to be able to show a permit in hand, and I want to be able to show that there's nothing stopping this team and there's nothing stopping this industry. And we happen to be in the position of having a very long head start on some other competitors, but it's go time. I think we've been waiting for this opportunity. I've certainly been waiting for over 5 years now with this company. And it feels we're getting closer and closer to the goal line. Maybe it doesn't feel all the time that we're moving as quick as we would like, but that's okay. And that's because we see the opportunity, we see a very supportive administration. But even beyond that, we see a supportive country in Western world that understands the necessity to remove itself from the grasp of China control over some of these metals. And I think we are best positioned to do that.

Deep Sea Mining has a long history of ambitious timelines that slipped. First production is targeted for late 2027. What gives you confidence that date holds this time?

Well, because it's more in our control. It's based on the pace of spending and the pace of vessel preparation between TMC and Allseas. Yes, deep sea mining has had ambitious timelines that haven't been hit. For the most part, those have been mainly to do with more outside factors. I think this one is more in our control, particularly given the fact that we and Allseas have the confidence on the permitting front. You could say that about any resource, however. Resources in general, tend to have CapEx blowouts or delays in the time line. In fact, one of the reasons the nickel market is so dominated by Indonesia is that other people elsewhere trying to pursue new technologies and in fact, HPAL technology, where the average capital blowout is 3 to 4x to initial expectations and delays of 10 to 15 years are common. It takes 20 years to open a nickel or a copper mine. So that's not just focused on deep sea mining. That's a reality of the resource industry overall. And I think where investors can get confident in TMC is that we're getting closer to controlling more of the timeline ourselves. And also the fact that I think we see a clear path on beginning offshore production, should quell concerns of these multiyear types of delays that tend to be prevalent elsewhere.

Craig, we have been choosing all the questions up until now. Perhaps you'd like to look at some of the submitted questions. Choose 1 or 2. We've got about 8 minutes left and answer them.

Sure, sure. Well, first of all, nobody tell me what's going with England and Argentina, I'm recording it. I'm going to try to do some rapid fire. Danny Nugent, Are rare earths part of the narrative of the USA-B license area? Or is it not our focus?

Good question. Look, we have rare earths in there. I'm not going to say it's going to be 10%, 20% of our revenue. It's not that much for us. But we do know of flow sheets that can develop the rare earths and the nodules. We might be able to share a little bit more in our August earnings call about that. So while that is part of the discussion and other people talk about titanium being in nodules. We've been focused on the 4 main metals because we want investors to appreciate. That's where we expect most of the revenue to come from. We don't want it to be too promotional. Let's hop ahead a few others. Let's see.

Martin Wright, how confident are you with the Allseas partnership? People with high respected positions in Allseas are spreading rumors of Allseas doing it themselves.

That's not true. There was a comment, I think, from somebody at Allseas maybe 18 months ago about how it's their technology and they're pushing ahead. I think that was taken out of context, maybe in a Dutch interview. Allseas and TMC are tied together as partners. Allseas is a 15% shareholder in TMC. They've spent hundreds of millions on their own balance sheet. They've invested well over $100 million in TMC directly follow their stock ownership. There's a reason they only add to this position and they're not selling. Allseas and TMC are tied-in and are going to remain that way.

Let's see. Am I looking too far? This is from somebody anonymous into the coincidence that Brownsville is so close to SpaceX.

Look, Brownsville is getting a lot of attention for a lot of different projects. Yes, the fact that SpaceX is just down the road, and they do need a lot of nickel superalloy down the road, that's part of it. We also know Steve Jurvetson is a TMC Board member. Of course, he's a SpaceX Board member. But really Brownsville just happens to be a place where it's pretty easy to do business and where they have a deepwater port and the port of Brownsville has been very constructive in talking with this.

I think somebody else mentioned in a question where do you think stand with respect to the exclusive rights to negotiate a lease option. We're in a very similar position where TMC, when we feel confident to go and to lock down the area required, nearly 1,500 acres. We're in a very good position at very attractive terms for TMC and shareholders to get that done. So we feel very confident on that point.

A couple more here. Let's see. Will -- and this is from Brian [ Duffield ]. Will bringing this amount of metals up from the ocean cause a supply shock to any of the 4 metal markets?

I don't think so. I think if you're talking about nickel again, each ship would be nearly 1% of the nickel market. Copper has more of a drop in the bucket. Cobalts, eventually, you could see us become a 10% global producer. I think for manganese, that's the one where one has to be careful about where you're placing it. There are domestic needs for the United States and manganese, but a lot of that is consumed in India or South Korea, Japan in the carbon steel market. So that's the one where we have to be careful and make sure about where we put it, but even so, you're going to talk about 4 or 5 ships necessary to really make a dent in that manganese market.

Eventually, yes, we'll be -- we expect the largest manganese producer on earth, but that doesn't mean that it's going to create a market. It means perhaps some higher cost, potentially higher environmental impact supply has to shut down elsewhere.

Let's see, a couple more. A lot of questions on some more Allseas stuff. People asking me to blink 3x if we are -- look, if we're expecting a strategic news, what I would say is TMC is very cognizant of the fact that we speak a lot of webinars. We speak in a lot of conferences. When we're ready to provide other news updates, whether it's on the regulatory side, the strategic side, the government side, you're all going to hear about it at the same time. We're not out there trying to be promotional in this or that venue. But this is still an opportunity for us, I think, to constructively answer a lot of questions like this.

Will TMC be issuing a revised PFS with the additional mining area in the USA-B application area?

That's an interesting topic. I think we do see an opportunity for a relatively modest amount of capital to take more of the resource and move it up the certainty curve, much of USA-B is in the inferred category. And I don't think it necessarily takes a whole lot to then do additional sampling, to do additional imaging and then increase that to indicated or measured. It will take a little while before you get the confidence of moving it to reserves. I think more likely, you would focus on adding to the reserves that are already within USAA. But yes, I think there truly is an opportunity where with additional campaigns as we begin commercial operations, you can start bringing more of that resource of the curve, and that's certainly our intention. So is there a PFS coming forward down the road, eventually, of course, you think about doing a PFS. But first of all, I think the low-hanging fruit is more exploration work.

I think, Craig, unless there is anything else, that's probably a good place to stop. I see there's probably another 40 questions. Please record them. I'll see if I can group some of them together and then maybe at some point, we can feed them into another investor update and answer as many as I can before our 05:00 call here ends, but to just make sure that RedChip saves them. And then if anybody else wants to ask questions directly, again, we'll do what we can on a public basis, but send an e-mail to investors -- at [email protected], and those will go directly to my inbox.

Perfect, Craig, sounds like a plan. We already have collected all those questions, and we do appreciate all the people who wrote in today. For more information about The Metals Company reach us at 1-800-RedChip or e-mail us at [email protected]. You can also visit RedChip's Investor Information page for The Metals Company. It's themetalscompanyinfo.com, There, you can view and download the investor presentation and fact sheet and sign up for news alerts on the metals company. And tomorrow, I just want to remind everyone at 09:30 Eastern, we have a very special Vertical Economy Investor Conference. It's a daylong webinar delivering direct access to publicly traded companies leading the transformation of airspace into the next great economic frontier. Register for tomorrow's conference and for all RedChip webinars at redchip.com/events. Thanks to our many hundreds of participants today. And thanks, as always, Craig.

Thank you, Craig. Thanks, everybody. Take care.

Ladies and gentlemen, welcome to the Annual General Meeting of Shareholders of TMC the metals company Inc. Please note that today's meeting is being recorded.

I would like to introduce you to Mr. Gerard Barron, CEO and Chairman of the company. Mr. Barron, the floor is yours.

Well, good morning or good evening, wherever you are. My name is Gerard Barron, and I'm the Chairman of TMC the metals company Inc., and I am pleased to welcome you to our annual meeting. The meeting is being held virtually as we believe hosting a virtual meeting enables greater shareholder attendance and participation from any location around the world, improves meeting efficiency and our ability to communicate effectively with our shareholders and reduces the cost and the environmental impact of our annual meeting.

At the meeting, registered shareholders and duly appointed proxy holders will have an opportunity to participate, ask questions and vote, all in real time, through a web-based platform. And I would like to remind you that only registered shareholders that have logged in to the meeting with their previously obtained 12-digit control number or duly appointed proxy holders are entitled to vote at the meeting. Ask questions or take an active part in the meeting on the web-based platform. If during the meeting, we encounter any technical difficulties, please remain logged on, and we will resume as soon as practical.

I remind everyone that today's meeting may include forward-looking statements. These statements are given as of today's date and involve risks and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission, or the SEC, which are available on the website of the SEC at www.sec.gov or in the Investors SEC Filings section of our website at www.metals.co.

And in accordance with the articles of the company, I will act as the Chairman of this meeting. I will now call the meeting to order. I call upon Craig Shesky, the Chief Financial Officer, to act as secretary of the meeting. Maria Vaz of Continental Stock Transfer will transfer -- and Trust will act as the Scrutineer and inspector of elections for the meeting. This meeting will consist of the formal business of the meeting, followed by an opportunity for general questions and answers.

Before we proceed with the business of the meeting, I would like to note that for each matter being considered here today, you may ask questions through the virtual meeting platform. If you are a registered shareholder or a duly appointed proxy holder and have a question that is relevant to the business of this meeting, you are welcome to ask it through the web portal. And if you have a question not directly related to the business of this meeting, I kindly ask that you wait and ask that question after the formal business of the meeting. We propose to address questions not relevant to this meeting after the formal business portion of this meeting has concluded. And I will, therefore, ask that any questions regarding the operations or financial status of the company be deferred until that time.

The notice calling the meeting and the shareholders and describing the matters to be considered today was mailed on April 17, 2026, to the company's shareholders of record on April 2, 2026. The declaration with respect to such mailing is available for inspection by any shareholder and will be retained with the records of the company.

As Chairman of the meeting, I have asked our General Counsel, Ryan Coombes, to administer the formal voting portion of the meeting. I remain Chairman of the meeting. So Ryan, please proceed.

Thank you, Gerard. Voting on matters today will proceed as follows. I will ask for someone to make the formal motions at the appropriate times. Voting on all motions will be conducted through the virtual meeting platform. Voting on the applicable items of business will be conducted by electronic ballot. Polling is now open for all matters presented in the proxy statement, which was made available to shareholders on April 17, 2026. We will announce when voting will close to allow you time to submit your final ballots. If you have submitted a proxy, you do not need to vote today. You would only vote today if you are changing the vote you submitted by proxy.

Once the balloting closes, the scrutineer will tabulate the results of the vote for each matter. Official results of the vote will be announced closer to the end of the meeting, and the company will file a Form 8-K with the SEC within 4 business days of the meeting reporting the results of the vote.

The scrutineer has advised me that prior to the meeting, proxies were received from the holders of a sufficient number of common shares to constitute a quorum.

There are at least 2 persons present in person or represented by proxy, representing shareholders holding in the aggregate at least 213,376,047 common shares.

Thank you. I adopt the scrutineer's report and declare that a quorum is present. I ask the secretary of the meeting to please ensure the scrutineer's report forms part of the minutes of the meeting.

Notice has been given in accordance with the articles of the company. And as a quorum is present, I declare that this meeting is properly constituted for the transaction of business.

I now place before the meeting the financial statements of the company for the year ended December 31, 2025, together with the report of the auditors of the company thereon. These documents are also available on EDGAR. I do not propose to read these documents at this meeting. You may ask questions about the financial statements through the virtual meeting platform at this time, although as previously mentioned, questions regarding the broader operations and financial status of the company should be deferred until the Q&A session, which will take place after the formal business portion of the meeting.

I now declare the financial statements of the company for the year ended December 31, 2025, together with the report of the auditors of the company thereon have been received by the shareholders as submitted to the meeting.

The next item of business is to fix the number of directors of the company to be elected at this meeting at 10. Will someone move that the following ordinary resolution be adopted and approved, resolved that the number of directors of the company be fixed at 10.

I so move.

You've heard that the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask that those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect to fixing the number of directors.

[Voting]

I will now move to the next item of business. As mentioned, all results will be announced at the end of the meeting.

The next item of business is the election of directors. The only persons who have been nominated to stand for election as directors in accordance with the procedures set forth in the advance notice provision contained in the company's articles are the nominees set forth in the proxy statement for this meeting. As set forth in that proxy statement, the Board of Directors has nominated the following directors: Gerard Barron; Andrew Greig; Andrew Hall; Michael Hess; Stephen Jurvetson; Andrei Karkar; Sheila Khama; Christian Madsbjerg; Brendan May; and Alex Spiro. Since there are no further nominations, I declare the nominations closed.

Will someone move the election of the persons nominated as directors of the company?

I so move.

You've heard the motion as moved. Is there any discussion on the motion?

As there is no -- as there are no questions, I would now ask those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the election of directors.

[Voting]

I will now move to the next item of business. As mentioned, all results will be announced at the end of the meeting.

The next matter to be dealt with is the proposed appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026.

Will someone move that the following ordinary resolution be adopted and approved, resolved that Ernst & Young LLP be appointed as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026?

I so move.

You've heard the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the appointment of Ernst & Young.

[Voting]

I will now move to the next item of business. All results will be announced at the end of the meeting.

The next matter to be dealt with is the nonbinding advisory vote to approve the compensation of our named executive officers as disclosed in the proxy statement for this meeting. The description of the compensation of our named executive officers is set out in the heading, Executive Officer and Director Compensation in the proxy statement.

Will someone move that the following resolution be adopted and approved on a nonbinding advisory basis, resolved on an advisory basis that the compensation paid to the named executive officers of TMC the metals company Inc., as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including under the section of the proxy statement, Executive Officer and Director Compensation and the related material disclosed in the proxy statement is hereby approved?

I so move.

You've heard that the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask those shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the advisory vote on executive compensation.

[Voting]

I will now move to the next item of business. The next matter to be dealt with is the nonbinding advisory vote on the frequency of holding an advisory vote on the compensation of our NEOs. Shareholders may vote to hold such advisory vote every 1 year, every 2 years, every 3 years or may abstain. The Board of Directors recommends a frequency of every 2 years as more particularly described in the proxy statement for this meeting.

Will someone move that the nonbinding advisory vote on the frequency of holding an advisory vote on the compensation of our named executive officers as set out in the proxy statement be put to a vote of shareholders?

I so move.

You've heard the motion as moved. Is there any discussion on the motion?

As there are no questions, I would now ask the shareholders and proxy holders present online who have not already done so to please vote by ballot in respect of the frequency of future advisory votes on executive compensation, selecting 1 year, 2 years, 3 years or abstain.

That concludes the placement before the meeting of all the resolutions and other items. You've heard the motions and have had the opportunity to cast your ballots in respect of each of today's resolutions and other items on the virtual meeting platform. As a reminder, if you have already submitted a proxy, there is no need to vote today.

Balloting will be closing momentarily, so please submit your final ballots now. Once the electronic balloting closes, your ballots will automatically be submitted.

[Voting]

I would now ask the scrutineer to please close the polling. Thank you, and voting is now closed.

I confirm the voting results.

I declare the motion fixing the number of directors at 10 to be carried. With respect to the election of directors, each nominee has been duly elected to act as a director of the company until the next Annual General Meeting of Shareholders or until their successors are elected or appointed, subject to the provision of the Business Corporations Act, British Columbia and the articles of the company.

I declare that Gerard Barron; Andrew Greig; Andrew Hall; Michael Hess; Stephen Jurvetson; Andrei Karkar; Sheila Khama; Christian Madsbjerg; Brendan May; and Alex Spiro be elected as directors of the company to hold office until the next Annual General Meeting of the company, subject to the articles of the company, unless they cease to be directors before then.

I declare the motion to appoint Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026, to be carried.

I declare the nonbinding resolution approving on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement for this meeting to be carried.

And finally, with respect to the nonbinding advisory vote on the frequency of holding an advisory vote on the compensation of our named executive officers, that the frequency of 2 years received a majority of the votes cast and is the frequency selected on an advisory basis by shareholders.

Will someone conclude -- move to conclude this meeting?

I so move.

Thank you. Since the motion has been duly moved, the motion is carried by acclamation. The meeting is now concluded. Thank you.

As mentioned above, at this time, I would like to thank everyone who's attended today's meeting and open the floor for any questions.

Seeing no questions at this time, I will turn it back over to the moderator.

Thank you for attending today's meeting. You may now disconnect.

Good afternoon, everyone and thank you for participating in The Metals Company Third Quarter 2026 Corporate Update Conference Call.

Joining us today are the metal company's Chairman and Chief Executive Officer, Gerard Barron; Chief Financial Officer, Craig Shesky; and Chief Innovation and Offshore Technology Officer, Rutger Bosland .

Following their remarks, we'll open the call for your questions. Before we go further, I would like to turn the call over to CFO, Craig Shesky as he read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 and that provides important cautions regarding forward-looking statements and information about the use of non-GAAP measures. Craig, please go ahead.

Thank you very much. Please note that during this call, certain statements made by the company will be forward-looking and based on management's beliefs and assumptions from information available at this time. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control.

Additionally, please note that the company's actual results may differ materially from those anticipated, and except as required by law, we undertake no obligation to update any forward-looking statements. Our remarks today may also include non-GAAP financial measures, including with respect to free cash flows. And additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide deck being used with this call and will also be posted on our website.

You're welcome to follow along with that slide deck or if you're joining by phone, access it at any time at investors.medals.co.

I'll now turn the call over to our Chairman and CEO, Gerard Barron. Gerard, please go ahead.

Thank you, Craig, and thanks to all of you for joining us today. Well, as we said during our last call, if 2025 was about a transformational piece, 2026 is about accelerated execution. In the 6 weeks since our last call, we have several developments to report from TMC, our partners, our regulator and the emerging nodule industry in general. The big development this week was the signing of our production agreement with Allseas, which will enable us to complete commission and operate the first commercial polymetallic nodule collection system.

The agreement [indiscernible], and while many of the key commercial terms and concepts have been reflected within our filings and technical reports for years, I believe the signing of this agreement shows the confidence that we and Allseas have in the regulatory path forward and the confidence that now is the time to prepare for commercial production.

In late April, NOAA determined our consolidated application for TMC USA project to be in full compliance. With the requirements of the Deep Seabed Hard Mineral Resources Act and its implementing regulations. This milestone represents the latest in what we expect to be a consistent and transparent cadence of regulatory milestones in the coming weeks and months.

And we expect that our application will shortly be posted to the federal registrar. Kick starting one of a number of sequential public comment periods as part of NOAA's rigorous process. Once our application is certified, NOAA will notify the public of its intent to prepare and publish an environmental impact statement under the National Environmental Policy Act. A draft EIS and TCRs will also be posted for public comment. And once the EIS and TCRs are finalized, NOAA is expected to make a final determination on issuing the license and permits.

You'll notice that the commentary in blue on this slide are required to remain open for 60 days, and they represent elements of the compressed ensuring due consideration for our application and a robust process. Noncompressible [indiscernible], there are no mandatory time limits on other steps. So the regulator has some flexibility in how they move through the [ trials ] and we continue to expect the grant of our commercial recovery permit during Q1 of next year.

Our strategy has always relied on partnerships. The quality and depth of the strategic partnership we've assembled across offshore operations, onshore processing and refining and project execution is what has allowed us to move fast.

And on the offshore side, Allseas brings more than 40 years of deepwater engineering and operations including a long track record of pioneering entirely new offshore technologies at industrial scale.

Across processing and refining, we have strong relationships with globally recognized metallurgical and engineering groups, including PAMCO, Glencore's XPS, Hatch, Korea Zinc, all of whom have already worked with nodule derived materials.

And together with our partners, we have collected, lifted and processed thousands of tons of polymetallic modules, something no other company in our industry has achieved. We believe in this level of industrial capability around the project is one of the reasons TMC continues to maintain a [indiscernible] over others in the offshore mineral sector.

And while others are still exploring, we are already building an integrated [indiscernible] refining and ultimately downstream. On May 11, we signed an agreement with Allseas for the completion of the development of the first commercial production system and the future operation of this system after expected permitting approval. Much of this work is already well advanced.

And in a clear sign of their confidence that this industry is moving towards commercial readiness, Allseas have agreed to fund a significant portion of the preproduction costs after these costs to be repaid over time after commencement of production. This agreement is not just a major milestone for TMC and Allseas, but for the development of the Seabed Mineral Industry more broadly.

And I'm pleased today we have TMC's Chief Innovation and Offshore Technology Officer, Rutger Bosland on the line to tell you more about our offshore system and operations.

And of course, Rutger led the development and successful testing of our pilot module collection system, while he was at Allseas before coming over to join our team to help bring us to commercial operations. Rutger, over to you.

Thank you, Gerard. It is a pleasure to be here today. What you see here are the key elements of the first Integrated Commercial Offshore and Production System designed for continuous operation, the system collects nodules on the sea floor and lift them to the Hidden Gem production vessel where they are dewalled, temporarily stored and then transferred to transport vessels to be shipped to shore for processing.

The operation integrate offshore nodule collection, vertical transport, transfer activities, support vessels, environmental monitoring and adaptive management and downstream logistics into a continuous operating model with tightly coordinated logistics.

Our offshore operational model has been designed to support uninterrupted offshore nodule collection. A transfer vessel will move alongside and receive nodules from the hidden gem, while the hidden gem system keeps collecting nodules and move to the offshore transfer area for loading on to-go carriers. Now carriers are then loaded offshore and transport nodules onward to onshore processing facilities.

Supply vessels rotate crew and shuttle fuel and materials between our logistics base in San Diego and Hidden Gem and the transfer vessel. These operations require highly synchronized vessel movements, dynamic positioning and coordinated transfer activities to maintain safe, efficient and continuous production.

To achieve this, our project team and Allseas have conducted extensive simulation and modeling to refine these logistic cycles on the real offshore conditions. As engineers, we love a challenge. And we are focused on ensuring that our system can operate reliable and efficiently day after day, while integrating seamlessly with production support, transport and handling systems at the surface to maintain continuous operations.

This work has produced what we believe will be practical and scalable operations, and we will continue to further optimize every aspect of these cycles ahead of commercial production. The execution program for the offshore production system is underway. Concept and basic engineering activities for the key room lead packages have been substantially event and completed by all seeds including for key items like the riser, lounge recovery system, umbilical and vessel integration works.

With these activities complete, we are now in a position to move into procurement and subcontracting activities with suppliers. This program keeps us on track to begin integration and commissioning of the production system in late 2027. The first commercial module production system is a major milestone for the company and this industry. It also establishes the operational and engineering baseline for future optimization. As we deploy additional offshore production system, it becomes easier to repeat engineering processes at scale and to incorporate operational learnings across the broader production network.

The team has been hard at work evaluating opportunities to optimize our operations including large-scale production system, autonomous and remote vessel operations, alternative logistic configurations and what could potentially be the first nuclear-powered vessels in commercial use a topic that Allseas discussed during the TMC Strategy Day panel in 2025.

A larger production system and wider collector spreads could significantly improve throughput and overall asset utilization while autonomous and remote offshore operations could reduce offshore crew, fuel and support requirements over time.

We are also evaluating the direct offloading of modules from the Hidden Gem to dynamically position still carriers, simplifying offshore transfer activities and reducing transport costs. This growing industry is dynamic as we scale the many optimizations being developed to serve the Seabed Minerals ecosystem are creating incredible roots towards continuous reduction of offshore collection and transfer costs. Though some of these concepts require further development they highlight the optionality and scalability of our offshore production model beyond the first system.

With that, I would like to hand it back over to Gerard. Gerard, please proceed.

Thank you, Rutger. Well, a little over a year ago, President Trump issued an executive audio that altered the trajectory of our industry. It provided a clear policy signal that offshore minerals were a priority for the current administration and that was willing to leverage America's long-standing legal regime to secure industry leadership. The response was unprecedented. At least 9 American companies focused on offshore minerals in the high seas and exclusive economic zones.

We [indiscernible] companies now have about 1.5 million square kilometers of the sea floor under license or application, like virus $5 million to $8 trillion in contained mineral value. American Shale Revolution helped the U.S. to end its energy dependence and become a net energy exporter. And we believe that offshore minerals have the potential to do the same for American mineral dependence when it comes to critical and rare earth provided we established domestic processing and refining capacity. The national security case for construction of domestic nodule processing and refining facilities has grown stronger.

After all four of our base metals were designated critical in the latest USGS list. The administration issued a presidential reclamation warning of the Sirius National Security risks posed by Americas near total import reliance for metals like manganese, cobalt and nickel. And more recently, our request for project proposals from the Defense Industrial Base Consortium, which TMC recently joined, underscored the administration's efforts to reduce import dependencies and 13 minerals, including nickel. These domestic actions are unfolding in response to the weaponization of IPR in critical minerals.

Several governments are restricting exports of metals, such as nickel, manganese and cobalt as well as all present in our modules. Our recent OECD report found that nickel, cobalt and manganese from the 10 metals most affected by export restrictions. These are serious matters for the U.S. to solve, and we will continue working with officials on both sides of the aisle to do our part in the coming decades. And to that end, we've been looking at several sites to build domestic processing and refining facilities.

TMC USA currently holds an exclusive right of negotiation with the port of Brownsville over land that could support a large-scale metals processing and refining ecosystem. Importantly, this is not just about TMC's first process has been sized with the potential to support a broader American offshore minerals industry and facilities designed with the flexibility to potentially process terrestial feedstocks over time as well.

The proposed site covers approximately 1,466 acres across 2 parcels adjacent to the Brownsville shipping channel, with a pre-feasibility study already underway become what 12 million tonne per annum industrial park. And we're approaching this in a disciplined way. There is no capital commitment today, and any further development would remain contingent on government support. And I'm sure everyone can appreciate the sensitivity of our ongoing U.S. government discussions, but I'll just reiterate that we continue to have frequent discussions with the departments and agencies named in the [ order], and we'll share more information at the appropriate time.

To advance our potential processing and refining plant and a strategic partnership agreement with Mariana Minerals, whose team combines deep industrial project experience with software names designed specifically for large-scale mineral processing projects. What attracted us to Mariana was not just the means and construction experience, but their focus on integrating software, automation and AI-driven operational system in direct project delivery and planned operations from day 1. Mariana's leadership includes former executives and operators from companies, including Tesla, BASF, Exxon, Lithium Americas with experience spanning mineral processing, EPC execution, variable scale commissioning.

And the partnership is intended to accelerate feasibility work around the Brownsville site while also evaluating how advanced process controls operational software and digital project management tools could improve execution time lines, capital efficiency and long-term operating performance. Importantly, we're evaluating Brownsville not simply as a processing site for TMC USA's initial production area, but as a potential long-term industrial platform capable of supporting broader growth in American critical mineral supply chains.

As additional American operators move through the NOAA licensing process, we believe there could be meaningful strategic advantages in developing shared downstream processing infrastructure rather than duplicating stand-alone facilities. This is still early stage work, but we believe these are the kinds of long-term industrial partnerships required to build a scalable domestic critical minerals industry.

On April 8, the metals royalty company, TMC, began trading on NASDAQ. Craig joined NASDAQ with the TMC team including our current and former Board members, Michael Hess and Brian Paes-Braga. On a personal note, I'd like to congratulate Brian, Michael and the entire TMCR team on this milestone. And I'd like to congratulate them on their recent capital raise and [indiscernible] the Mesabi Metallics royalty. And I'll now turn the call over to Craig to discuss these topics in more detail and also walk you through our financials. Craig, over to you.

Thanks, Gerard. As a reminder, the cornerstone of TMCR's portfolio is a 2% gross overriding royalty on the Norway, which originated from our 2023 agreement with the predecessor company low-carbon royalties. As part of that agreement, TMC received an equity stake in TMCR itself, whose market capitalization has appreciated significantly and now stands at roughly $0.75 billion, indicating a value for TMC's current 25% equity stake of nearly $200 million.

Importantly, we retained the right to repurchase up to 75% of the [ NORI ] royalty over time at a capped return, which could ultimately reduce that royalty to 0.5%. And since listing, TMCR has also announced, as Gerard noted, a proposed royalty interest in Mesabi Metallics iron ore project in Minnesota. One of the United States only large-scale sources of merchant DR-grade iron ore pellets with production targeted for the second half of 2026, alongside a concurrent equity financing.

It's also worth mentioning that the US Exxon Bank previously announced its support up to $10 billion for development of a major iron ore processing and refining facility with Mesabi Metallics in Minnesota. I would encourage all of our investors to check out the corporate update webinar held by TMCR on May 13, just yesterday, and that's available for replay at their website, the metalsroyaltyco.com. Last August, we announced two major technical studies, pre-feasibility study and an initial assessment. The PFS on our first production area -- excuse me, the PFS is focused on our first production area. And establish the world's first reserve for a nodule project, while also confirming the project's strong commercial case.

The initial assessment extended across the other areas highlighted on this slide in Royal Blue. These studies were comprehensive and independently supported by multiple qualified persons, but they do not include the additional ground where we have priority rights under U.S. law. Because those areas sit close to the zones already assessed in our published studies, we see them offering substantial further exploration upside. And it's important to remember that these studies are point-in-time analyses, which do not reflect certain potential plans, such as the U.S. government supported processing facility nor do they reflect every opportunity that we and Allseas might have to reduce costs offshore, as Rutger walked us through earlier.

But they do provide a helpful snapshot into the commercial viability of our proposed operations, particularly given the world first declaration of probable reserves in our PFS for a nodule project. At today's metal prices or close to today's metal prices, the value reflected in these studies is substantial. Taken together, the $5.5 billion NPV from the PFS plus the $18.1 billion NPV from the initial assessment, imply combined estimated resource of $23.6 billion. And across the life of both projects on an undiscounted basis, the studies point to approximately $369 billion in revenue and more than $200 billion in EBITDA and a cost profile that places the project in the first quartile of the nickel cost curve.

Now on to our liquidity and financials. You would have noticed that our liquidity, defined as cash on hand plus our credit facilities, was approximately $164 million as of March 31, 2026. However, I want to be clear, as noted in our earnings release, this is inclusive of $9 million received on the last day of the quarter related to sell to cover tax transactions on stock-based compensation granted in prior years which was then remitted to tax authorities shortly after quarter end.

So this is merely a bit of a timing cork, given the date on which the sell-to-cover transactions had to occur following our last reporting period. And then once that was finished and funds received, those are remitted to the tax authorities. Keep in mind that the headline number reflecting vesting shares that were granted at far lower share prices, and we expect a strong alignment of interest between TMC employees and shareholders will continue to deliver results in the years ahead. On to the financial results.

TMC reported a net loss of approximately $20.6 million in the first quarter of 2026, which was the same as the comparable period in 2025. Net loss per share was $0.05 in the first quarter of 2026 compared to $0.06 in the comparative period. Exploration and evaluation expenses for the 3 months ended March 31, 2026, were $13.3 million compared to $9.5 million in 2025 and due to higher share-based compensation from third quarter 2025 awards for employee retention and higher PFS costs due to the PFS refresh, partially offset by lower all-season engineering costs.

G&A expenses in Q1 2026 were $20.7 million compared to the $8.5 million in the comparative quarter last year. primarily due, again, to the amortization of higher onetime executive retention grants to share-based compensation issues in the third quarter of 2025. I'm getting a bit of an echo. So if anybody else in the line is able to mute, hopefully, we can get rid of that. In Q1 2026, the gain on change in fair value of warrants was $10.7 million as the value of the private warrants decreased due to the lower share price at the end of Q1 2026 compared to the share price year-end 2025 in the shorter maturity term.

On other nonoperating items, other nonoperating items that reduced the net loss in Q1 2026 included higher interest income generated from increased cash balances and a gain resulting from the dilution of our ownership in the metals royalty company as it completed a private placement to third parties at a price well in excess of book value, and that was partially offset by equity accounted investment losses. On the cash flow side, net cash used in operating activities was in the first quarter of 2026, $0.6 million compared to $9.3 million used in operating activities in the first quarter of 2025.

The outflow in Q1 2026 is nominal due to a timing difference, as I mentioned earlier, the $9 million of taxi Holdings received at the end of March and remitted to tax authorities shortly after the end of the quarter. If the taxable holding receipts are excluded, the cash used in operations would have been $9.6 million, which is in line with the first quarter of 2025. Free cash flow for Q1 2026 was negative $0.6 million compared to negative $9.4 million in Q1 2025. And free cash flow is a non-GAAP measure. And I would point you to our disclosure in the non-GAAP reconciliation table that will be posted in the slide deck with our website.

We do believe that our cash on hand, along with the undrawn unsecured credit facility from Gerard, our CEO and Chairman; and ARIS Capital LLC will be more than sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from today. TMC liquidity stood at $164 million as of March 31, including $44 million available from that undrawn credit facility. O

ur accounts payable and accrued liabilities balance at March 31, 2026, was $53.9 million and includes $32.1 million that was owed to Allseas through various services provided, the majority of which is being settled through the issuance of TMC shares as disclosed in our 10-Q. Excluding the Allseas payable to be settled in equity and the $9 million payable to tax authorities, which has since been remitted, accounts payable and accrued liabilities would have been at quarter end $13 million. Operator, we would now like to open it up to the phone line for any Q&A.

[Operator Instructions]. And our first question will be coming from the line of Matthew O'Keefe of Cantor Fitzgerald.

Thanks gentlemen. It sounds like things are moving along pretty well. I just had a kind of -- I like one of your slides there. You had -- you showed that you have some new -- well, not new entrants, but there are more entrants jumping on to the American offshore industry here. You've shown some other companies and all in their properties lying about in the CCZ and also, I guess, other parts of the ocean there.

What are your thoughts on these other players? And are you working at all with them? I mean you have arguably a leadership position in this. I would imagine there has been some outreach to you, just maybe for some best practices or given that you've done so much environmental work, I would maybe some advice on that as well?

Yes. Look, Matt, we've been familiar with some of the other entrants. We know them well. And frankly, the last 5 years as a public company has damaged my belief in the efficient market hypothesis. But at the same time, it wouldn't be good for us to be the only ones through the wall here, seeing the opportunity. So I think what it really signifies is the fact that the capital, the smart money is flowing into names that are pursuing exploration licenses through the U.S. process as opposed to the International Seabed Authority process.

That's clear. The market is voting with their feet.

Are there opportunities to -- are there opportunities there potentially to work with some of these entrants? Sure. I mean we've done quite a bit of work over the course of the last several years that many other people might want to catch up to. Of course, we released some of our environmental data just a few weeks ago. But there really is, I think, a recognition that many of the new entrants have some catch-up to do. They're starting on exploration type work, whereas TMC has done much of that because we are preparing to launch an application to the ISA process with some of that data.

So there will be, I think, a catch-up period for others, and that creates opportunities. One thing to really focus on -- and by the way, you would have noticed there was an announcement within the last couple of months that the team had deep sea vision. We have an MOU to collaborate potentially together, whether it's on some offshore exploration side initiatives or we're potentially down the road on processing and refining. We do want to be able to help the United States create an ecosystem that can potentially create dominance in the metal processing and refining for nickel, copper, cobalt, manganese, potentially rare earths and other metals.

And to do that, it would be very helpful to say, hey, TMC will be the center of the hub but perhaps 1 day, that could be a destination for some other entrants as they catch up to some of the offshore work that TMC has done. So we really have been in a unique position where the work that we've done has allowed us to be the one entrant so far, who's been able to apply for the consolidated application process because we've been prepared with that work over the last 15 years and about $700 million in cumulative lending.

So the answer, Matt, is we welcome the capital flowing in the space. We know some of the new players, and I think there will be future opportunities to work together.

Absolutely. Definitely demonstrates that there's increasing confidence in the space. So I think that's a positive. If I could ask just one other quick question, maybe a clarification. You are working on some pre-feasibility study was it for the Texas refinery processing refinery. Is that right? And is that -- is there going to be something released to the markets sort of end of year or something like that, just to get a sense of what that might look like?

Yes. I think our focus, Matt, is really on the feasible work, specifically for the potential plant for processing and refining in Texas. That feasibility work, really focused on our Tiers, the detail on everything that needs to go into the planning and construction and operation of that plant. And that is really the prerequisite to unlock some of the potential government capital that we know is sitting ready to fund major projects that can truly move the needle.

So I would say our focus is going to be on that onshore feasibility work. There may be opportunities to then say, right, we're working on the prefeasibility side for the plant expansion down the road, let's say, to 12 million tons or more. And then, of course, we put out the prefeasibility study for the NORI-D area in August of last year. And we had the benefit from several years of talking about potential commercial terms with our partner, Allseas.

So at some point, perhaps there might be an opportunity to provide some updates to that, but our focus in the near term is going to be the detailed feasibility work that might be to unlock access to government capital.

All right. Sounds good. We'll look for the government partnership perhaps in the future.

And our next question will be coming from the line of Dmitry Silversteyn of Water Tower Research.

I just have a couple of follow-up questions, if I may. We talked about reducing or the opportunity to reduce the operating costs or optimize the cost of offshore collection and transfer portion of your operating expenses. There's a lot of stuff in here like autonomy and going to nuclear that seem to be pretty far into the future. As you're ramping up your sort of first production of 3 million tonnes. How are you thinking about sort of more near term, more realistic abilities to lower the production and transport costs and lower your offshore operating expenses.

Yes. Thank you, Dmitry. That's a very good question. And as you rightfully indicated, there's a few items that are more future focused. But on the short term, optimizations in energy use and offshore logistics are definitely something that can be implemented within the short term. So we're talking about getting the first vessel operating and then start implementing some of those already.

Okay. And then to follow up on the previous question about bronze facility. You're looking at, I think, 12 million-ton processing complex. Your Phase 1 at least calls for about $3 million some the year of what modules going up to potentially $7 million as you expand Q3 collectors. Are you leaving that much room for sort of third-party processing? Or do you have expectations of filling that 12 million tonne capacity through the modules that you yourself collect pretty quickly after the start-up at the end of '27, early '28.

No, I think this is one of those industries where scale really flows through to the bottom line, Dmitry. And so it's our ambition to put as much of that 12 million tonnes of our own license areas. However, we also want to be really flexible because when you go and establish a processing facility, there is so much investment in civil engineering and securing the ground and putting the roads in and securing power supply that the marginal cost of adding another line for another operator can be very attractive.

And of course, we want to have the welcome mat to other operators. We see it as an opportunity to do deals that will be very beneficial for the industry and very beneficial for the TMC shareholders as well. And so there might be some operators who want to provide chunky capital to us to secure a certain amount of processing throughput. And so we'll have an open mind to that. And we are we are in some of those discussions as we speak now.

Understood, Gerard. And then final question. In your -- you're getting ready to execute your offshore CapEx program and get ready for production. If I remember correctly, originally, this was supposed to be funded 50-50 between you and all seats. You made a comment that Allseas will be funding a significant portion of that now? So should I -- should we take that it's going to be more than 50% of the expected CapEx that policies will be fully?

No, and you should continue to plan on us sharing that.

I'm going to hop over, Latonia, to the webcast questions to see if there are any other questions that are going to populate on the audio side in the meantime. We have a question from Ivan Schmidt.

Given that the expected -- given we're -- excuse me, expecting Q1 2027 permit timing, how should investors think about the political risk around 2026 midterms and potentially transition to new Congress in January 2027. And One of the nice things about this point, I'm happy for Gerard to expand on it. This isn't really a left versus right issue. Is it obvious that this current administration and Republicans have been very supportive of this industry, of course. But even going back to 2023, it was, I think, June of 2023, when there was first an announcement of the National Defense Authorization Act with President Biden that focused on doing more feasibility work on modules.

And of course, Gerard, we had quite a few conversations with many in the administration who saw the need for this new industry and to get there, frankly, before China does. But specifically, on any risk for midterm switch in the population of Congress. It's not going to affect this NOA process. This is based on regulations put in place in the 1980's. [indiscernible] was signed by President Carter implementing regulations from 1981 for exploration in 1989 for commercial recovery. It's been the law of the land across multiple Democratic and Republican administrations. So we're going through this in a methodical way, and we are not skipping over any steps.

It's why Gerard highlighted in our first slide, the public comment periods that are not going to be compressible when it comes to the permitting time line. that puts us in a good position to say, look, we've done the process exactly right, and we followed the letter of the law and the mandate given to NOA, who, by the way, is in the best position of anybody in the world to regulate this industry as the pioneers of the environmental science to the domes program in the late '70s and early '80s.

So we don't think that's going to have any impact on the potential grant or validity of a commercial recovery permit for TMC.

Another question and maybe for Gerard. I believe you touched on this in the last quarterly call from Tim Holl, Q4 2027 is the target for system commissioning. Is that the same as saying it's our hard for full production. So maybe just a little context on some of the timing taken for commissioning and leading to commercial production shortly thereafter.

Yes. Thanks, Craig. Look, conditionally means getting the equipment on board, making sure it works, making sure all the components come together nicely. And of course, what that points to is that early in the year after, we'll be out there testing, and we'll be out there making sure that we're in shape for commercial production. So commissioning is really getting everything on the board, putting it all together, making sure they all fit as they enter fit.

And the last question that we'll take from the webcast from Ryan Bowley. Will the September 2021 SPAC warrants be extended?

Ryan, this is a question we get, I'm sure, from a lot of holders. The terms of that warrant is expiration in September of 2026. Look, it's our ambition to fill this summer with a great amount of news flow, such that we might render that question. So we're going to keep doing everything we can. But any discussions with our Board are going to be announced publicly if and when there's anything to announce there.

But it would be our focus just to push the share price to a higher level well in advance of that exercise date. But nothing else I can say, no other comment I can make at this time.

And Latonia, if you want to reprompt the phone line to see if there are any final questions.

[Operator Instructions]. And I would now like to turn the conference back to Gerard Barron for closing remarks.

Yes. Thank you. Well, firstly, thanks, everyone, for turning up. And I know a lot of people listen to these reports live but even more listen to the transcript afterwards or read the transcript afterwards. Look, as you can tell, we've -- we turn up to these quarterly earnings reports full of enthusiasm because it's really quite exciting what we're doing, getting a new industry moving.

This administration has an absolute focus on reindustrialization. It's an honor to deal with the government agencies, which we deal with because they are filled with people from the private sector who know how to get things done. They just get -- you get a sense of optimism when you're dealing with this administration and these government agencies. And I hope what that is going to lead to is us getting this industry moving a whole lot faster, a whole lot more reliably and for the benefit of America becoming all independent and for the benefit of those people who supported us along this journey.

So thank you, and we look forward to being in communication, a lot with you in the coming months. And on that note, I wish you a good day.

And this concludes today's conference. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the metals company Fourth Quarter 2025 Corporate Update Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would like to hand the conference over to your today, Craig Shesky, Please go ahead, sir.

Thank you very much. Please note that during this call, certain statements made by the company will be forward-looking and based on management's beliefs and assumptions from information available at this time. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control.

Additionally, please note that the company's actual results may differ materially from those anticipated and except as required by law, we undertake no obligation to update any forward-looking statements. Our remarks today may also include non-GAAP financial measures, including with respect to free cash flows. -- and additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide deck being used with this call. you're welcome to follow along with our slide deck or joining us by phone. You can access it at any time at investors.metals.co. I'd now like to turn the call over to our Chairman and CEO, Gerard Barron. Jared, please go ahead. .

Thank you, Craig. And apologies to those on the line who we're a few minutes late, we're waiting for our light across the line. But welcome to you all. And before we get to the path forward, I'd like to take a moment to reflect on our journey over the last year, 1 year ago, to today in our fourth quarter in call, we announced a regulatory pivot that fundamentally changed our company's destiny, instead of the uncertainty in grid lock of the ISA, we chose the certainty and clarity of the U.S. regulatory regime built upon a long established legal framework under Desbro and catalyzed by the political will of this administration.

In April, this political will was made evident by the executives -- President Trump's Executive Order, I'm Lishen America's offshore Critical Minerals & Resources, which marked America's return to leadership in deep sea bed minerals. Some of the directors in this EO have already been delivered, including the modernization -- and of the Noa -- further evidenced by [Technical Difficulty]

Gerard, sorry to interrupt. Your line is cutting in and out.

[Technical Difficulty] into we focused on accelerated execution, starting with permitting. Our consolidated application submitted to Nova in January this year has been deemed substantially compliant and we expect our permit to be granted in less than 1 year from today. This permitting clarity also provides confidence to us and our partners to get building in anticipation of commercial production. Offshore, we have reached commercial agreement on key terms with our long-term strategic partner, Artis, and continue to progress the engineering work for the long lead items for our forthcoming production system, and we expect this agreement to be finalized in the coming days.

Onshore, it's also clear that the U.S. wants to dominate the onshore processing and refining polymetallic nodules, establishing accounted to Chinese stranglehold on the production of critical minerals. To do that, we'll require support from the government itself requisites for net at the Port of Texas, and have also reached agreement with our partner, Mariana Minerals to progress the feasibility work as part of the TMC owners team, but more on this shortly.

Since day 1, new success would depend on building a bench of exceptional has. And with the expertise to tackle complex challenges and the conviction to back in new industry, and as this chart shows, we've brought together a strong group of experienced partners across the value chain, each greening a unique skill set through our vision of reimagining the metals and mining sector.

What's changed and what matters is momentum. Many of our existing partners have deepened their commitments, reinforcing their belief in the long-term opportunity. We're also welcoming new partners who share our belief that this industry will be built in the United States. That growing alignment is a clear validation of where this industry is heading. And as I mentioned earlier, we've agreed key commercial terms with all fees to complete the development and operate the Hiddenjem offshore system, the first-ever commercial nodule collection system.

The continued strategic alliance which will be memorized in the coming days, brings together all these decades of offshore execution everis with our proven resource environmental and processing platform into a single integrated system designed for a nominal capacity of 3 million wet tonnes per annum using the hidden gem to collected vehicles and a vessel to transfer nodules to bulk carriers to ship them to shore.

And all these are currently working on key long lead items like the riser, our launch and recovery systems and the umbilical. We look forward to signing this definitive agreement in the coming days and continue to progress towards system commissioning still targeted for Q4 2027. We -- so one of the key actions outlined in last year's executive order was the directors of various government agencies to identify potential sources of financial support for this industry. And in order to unlock government support for onshore processing, there are a few boxes we must tick, including a site-specific plan and feasibility studies.

And to that end, back in December last year, we secured an exclusive right over a potential lease option in the Port of Brownell, Texas, where near ware plans have been recently announced by this administration is for the first new U.S. oil refinery in decades, underscoring the border momentum behind strengthening American industrial capacity.

We've developed a preliminary master plan and a pre-feasibility study is already underway for a 12 million tonne per annum nodule industrial park. Of course, existing capital-like tolling options are still available to us and we'll not be committing any capital at this time. But I'm certainly excited about what a domestic nodule processing hub can mean for both new partnerships and for our project economics.

Processed domestically, our nodule resource could single-handedly solve the American supply chain dependency across 4 key metals. And as I mentioned, one of the requirements to unlocking funding is the preparation of a feasibility study for a processing plant at a specific site. To that end, we're adding a new strategic partner to our bench in Mariana Minerals; Mariana's CEO, Turner; Coldwell speaking at last year's Strategy Day, is someone we know well from his time at Tesla, where he headed up global battery metal supply. The Marrieta team are pioneers of AI and software approaches to project development. and metallurgical processing and have demonstrated their ability to fast-track project execution, which enabled Tesla to build its lithium plant in Texas in less than 2 years.

The Marietta team will be joining us start of the TMC earners team, and we already enjoy a good working relationship with their team. Mariana's approach is core to have cutting-edge businesses like SpaceX and others operate. With AI, we think they can move even faster and believe their innovative model offers a faster, more modern approach to reindustrialization.

And subject to further definitive agreements, we look forward to exploring how their systems could reduce permitting and construction time lines for a domestic plant while reducing OpEx and increasing recovery of payable metals. In fact, right after this call, our team -- executive team, will convene in Texas with the Mariana's team for the next week to progress this mission-critical work, which is also a prerequisite for a certain U.S. involvement.

I'm also pleased to share that in April, just days away, the metals royalty company will begin trading on the NASDAQ under the TMC A quick refresher formed with the goal of onshoring critical minerals production in the U.S., DMCI has a 2% gross royalty on our NOI area. -- resulting from an agreement we signed with low carbon royalties in 2023. And we retain the right to repurchase up to 75% of that royalty over time at a cap to return, which could potentially reduce the royalty to 1.5% to 1%.

The TMC also maintained a 25% equity stake in TCR. Many TMC or faces will be familiar to our followers, including the current and former Board members, Michael Hess and Brian Targa. And with their backing and a strong team behind them, we see TMCR as a strategic vehicle which can potentially provide future options for capital and sizable project finance. I'd now like to turn the call over to Craig to discuss some industry updates, our regulatory path ahead and our financials.

Thanks, Gerard. One quick note that we shared actually in recent weeks in our social accounts. We recently joined the defense industrial-based consortium, DIBC partnership within the Department of Board's expansion and investment prioritization director of our capabilities. .

The initiative gives the government the tools he needs to cloud commercial solutions that can help close supply chain vulnerabilities and strengthen the defense industrial base. And of course, critical minerals and seabed are focused for the U.S. and allies.

And over the past year, we've seen investors and operators effectively vote with their feet, gravitating toward regulatory frameworks that offer clarity and incredible path to merchandization. While the ISA remains in gridlock, the U.S. has emerged as a leading jurisdiction and certain allies are relying upon the U.S. and certain areas of expertise to develop sea bed resources.

This shift is being echoed at the government. While in March, the US and Japan announced a new critical minerals action plan with an explicit focus on accelerated cooperation on the commercial viable deep mining. And against this backdrop, we remain the only seabed mineral developer with SEC compliant mineral reserves, which is the clearest definition of commercial viability, positioning us at the forefront of this emerging industry.

In January, Nova finalized revisions to accelerate permitting under the Deep Seabed Hard Minerals Resources Act introducing a consolidated application process that meaningfully streamline the path to commercial recovery. And TMC moved quickly to take advantage of that clarity, submitting the first consolidated application under this new framework.

This application expands our expected commercial recovery area from 25,000 square kilometers to approximately 65,000 square kilometers and is designed to significantly reduce permitting time lines. Importantly, it reflects the strength of our technical readiness and our ability to meet no requirements for commercial scale operations. We see this as a clear signal that the U.S. regulatory path is active, predictable and capable and reporting responsible development.

And now with more than 10 applications in the system, it is evident that the broader industry is aligning around the U.S. framework. The last time we updated you, we are progressing systematically through the NOAA permitting pathway and that remains the case today, even under this new consolidated path. With the consolidated application now active under NOAA's new rule, we have agreed to clarity on the process ahead and a clear line of sight and the key milestones required for final approval.

Our experience over the last year, particularly through NOAA's review of our exploration licenses, has provided valuable insight into the process and expectations for both TMC USA and NOAA. We announced on March 9th that we passed the first of these milestones with no determining our application to be substantially compliant and the next potential milestone being full compliance.

Based on this progress and what we've learned, we now expect the grant of our commercial recovery permit within the next 12 months. Now to get to this point, it's taken over $700 million and hundreds of research days at sea, and we are now nearing the completion of our environmental impact statement and our EIA is complete. And informed by the largest environmental data set in history over a petabyte in size. This comprehensive document reflects 15 years of scientific research conducted alongside leading institutions and demonstrates our body to responsibly collect knowledges using modern systems designed to maximize efficiency while minimizing environmental impact.

Put simply, better science leads to better design and better design leads to better environmental impacts. For those with a keen eye on our social media, you may notice that we've begun sharing key findings from our EIA publicly during a new video series, highlighting how our data addresses environmental concerns and how innovation has reduced our environmental footprint.

I encourage you all to check this out. And you can click on the PDF of this posted on our website to get to those videos directly or we encourage you to follow TMC on our social accounts, including Twitter and LinkedIn. We look forward to our EIS being made available for public comments soon as Panos transparent and audible process.

And as many of you know, and there may be some on the call who are with us in the room, we published a pre-feasibility study and initial assessment alongside our Strategy Day in New York last August. Covering our first production area, the PFS documented World First Reserve for inaugural project, demonstrating clear commercial viability. Our initial assessments cover everything else that you see in Royal Blue amongst our contract areas on this page.

Keep in mind that neither of these comprehensive studies, which were signed off by multiple independent qualified persons covering additional ground over which we now have priority rights through the U.S. process. This is represented in the lighter gray on this page. Given the proximity of these areas to those covered in our published technical studies, we do believe that these areas support significant exploration upside.

So our current metal prices, shifting to project economics, including that these projects are incredibly valuable. And if you combine the $5.5 billion net present value of a prefeasibility study and the $18.1 billion NPV for the initial assessment you arrive at a total estimated resource of $23.6 billion.

Over the life of both projects on an undiscounted basis, the studies outlined revenue of approximately $369 billion EBITDA in excess of $200 billion and a position in the first quartile of the cost curve as laid out in our PFS. However, despite the clear value of this high quality and abundant resource and our expected low-cost positioning, our valuation does remain below of comparable peer developers and explorers.

On the left side of this page, you'll see the TMC valuation example, where we're trading at about 8% of our underlying net present value, well below peer averages for explorers and developers and certainly below the average of nearly 1x NAV for nickel and copper producers. So as we march toward a clear permitting and -- clear permitting path and commercial production, we are looking forward to significant rerating in this valuation story.

On to liquidity TMC reported year-end only 25% cash balance of $117.6 million, and we expect at month end for March 31, 2026, to report approximately $110 million in cash. TMC liquidity, defined as cash plus borrowing capacity on our unsecured credit facility stood at $162 million at year-end 2025 and is approximately $150 million more and is expected to be approximately $154 million around month end March 31, 2026. And this means we have no imminent need to raise funds in the public markets.

As discussed in our last several quarterly conference calls, however, we are filing a new Form S-3 shelf registration statement in conjunction with our upcoming 10-K as a matter of good corporate housekeeping, and we do intend at some point in the future to refresh our ATM. However, there has been ATM use by the company since April of 2025.

On to our financial results. In the fourth quarter of 2025, TMC reported a net loss of $40.4 million or $0.08 per share compared to a net loss of $16.1 million or $0.04 per share for the same period 2024. The -- the net loss for the fourth quarter of 2025 included exploration and valuation expenses of $10.6 million versus $8.3 million in the fourth quarter of 2024, and General and administrative expenses or G&A of $34.1 million versus $8.1 million G&A in the comparable quarter last year, and a credit of $4.3 million from other nonoperating items versus a credit of $0.3 million from other nonoperating items in Q4 2024.

Exploration and evaluation expenses increased by $2.3 million in the fourth quarter of 2025 compared to the same period in 2024 primarily resulting from an increase in share-based compensation due to accelerated amortization of awards granted in the third quarter of 2025, partially offset by lower mining, technological and process development costs resulting from decreased engineering work.

G&A expenses increased by $26 million in the fourth quarter of 2025 compared to the same period in 2024 reflecting an increase in share-based compensation due to the accelerated amortization of awards granted to directors and officers in the third quarter of 2025 and an increase in legal, consulting and personnel costs. Other nonoperating items that reduced the net loss in Q4 2025, included higher interest income generated from our increased cash balances and again, resulting from the dilution of our ownership interest in the metal royalty company, as it completed a private placement to 23rd parties at a price well in excess of book value.

On free cash flow, the free cash outflow for the fourth quarter of 2025 was -- excuse me, was $11.5 million compared to $13.8 million for the fourth quarter of 2024. The net cash used in operating activities was $11.4 million compared to $13.8 million for the fourth quarter of 2024, primarily due to lower personnel and environmental payments, coupled with the interest earned on a higher cash balance in 2025 and partially offset by higher legal payments.

Focusing on the full year basis for the cash flow. On a full year basis, free cash outflow for 2025 was $43.1 million compared to $44 million in 2024. A net cash used in operating activities was $42.9 million compared to $43.5 million in 2024, reflecting lower environmental and mining technological payments and interest earned on a higher cash balance in 2025, partially offset by higher underutilization fees paid on the unsecured credit facilities, timing of payment on regulatory fees and higher legal payments.

Free cash flow is a non-GAAP measure, and I would point you to the non-GAAP reconciliation included in the slide deck. We believe that our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from today.

Looking at the balance sheet over the course of 2025, there was a significant increase in the cash balance as the following funds were received $85.2 million from the Korea Zinc investment, $41.2 million from other registered direct offerings, including the Hess family investment, $14.8 million from ATM use and $27 million from the exercise of various stock options and warrants.

A portion of these proceeds was used to repay the $7.5 million Altis working capital loan, along with other outstanding interest thereon as well as a $4.3 million draw on the Arisperan unsecured credit facility. Our accounts payable and accrued liabilities as at December 31, 2025, was $46 million and includes $34 million O2 sees for various services provided, the majority of which can be settled in equity.

The $131 million increase in royalty liability was the result of the change in fair value following the company's release of 2 economic studies in August 2025, which increased the value of the Norway project. The significant increase in the warrant liability over 2025 was due to the increase in the fair value of private warrants, which reflected the increase -- significant increase in our share price. With that, operator, we'd now like to open the call up for some Q&A.

[Operator Instructions] Our first question will come from the line of Heiko Ihle with H.C. Wainwright.

Can you guys hear me already Heiko. Yes, we can. I'm very intrigued by those negotiations for the module processing and mining up in Brownsville, obviously, given recent geopolitical risk factors that have just been going up quite a bit and just in general uncertainties that are going on. I think this might be quite interesting. A couple of things on that. Can you walk us through what you see of an impact with the shipping expenses if this Brownville will hub goes ahead and maybe quantify it?

I think the -- look, there are many exciting options about bringing material straight to the U.S. and shipping is one of them. Energy costs, of course, is another because the biggest inputs into our cost base when we process modules is energy and we for this administration for realizing that abundant energy leads to prosperity.

And there's no better example of that than the U.S. compared to -- in some other markets, and it's it's our estimate that you can actually process nodules cheaper in the site where we've located Brownsville, Texas compared to China or Indonesia or Japan because of energy costs and so -- and -- but shipping is also better as well. And it does mean having to bring them through the Panama Canal.

And there will also -- the site was chosen those have some deepwater berths available to it. they won't take the biggest ships that are available and that we'd like to use. But in time, the we think they can. And -- but no firm numbers that improvements to be made.

And then I know it's early, but can you walk me -- and you may not have all these answers yet. But can you walk me through key permits and time lines you think we need to build all this infrastructure, please?

Yes. It's important to note, Heiko, too. I mean what we're beginning here is site-specific feasibility work. At the same time, what I can say is that the particular site we're looking at does have many permits -- we continue to have continued discussions, very positive discussions with Governor Abbott's office in Texas and other agencies there. But it's important to note, a lot of this is going to be for a prerequisite of us making plans and moving forward, going to be dependent on some of the score we get at a bender level.

So really, the key permit here is the grant of commercial recovery permit by NOAA. And certainly, when we're talking to various agencies and cabinet departments, it is that permit that would ock, we think a lot of the support and potential investment for a facility like this. And one of the reasons, I think, that you're seeing TMC engage in some of this work on feasibility as well as us alongside our partner, Allseas, progress engineering work and beginning to think about ordering these long lead time items is due to our confidence in the grant of that commercial recovery permit in a timely manner.

Our next question will come from the line of Matthew O'Keefe with Cantor Fitzgerald.

Yes, just a question I want to follow up on Heiko's Texas question there. You are working on a feasibility study there. It sounds like Mariana is going to be a part of that. What's the timing on getting that done? And will we get to see sort of the results of that?

Yes, sure. Well, certainly, Mariana will be playing an important role as part of our owners team. We really have hatch working on the refresh of that -- of the PFS, which is based on bringing all those numbers to a Brownsville site. But we anticipate -- and that will be ready very soon. But we also anticipate well before the end of the year, having a, I guess, in the old language of BFS on what we're planning to put on the ground in Texas.

And so the date that is being talked about is end of October, and so not far away. And we certainly expect hatch and others to be involved in that as well.

And that's a good group. And then is that going to be a hide facility? Or are you going to look at an option of doing sort of the RCAF front end like you're going to be doing in Japan?

Yes. That's the exciting part. For the last -- since in fact, since Dr. Jeffrey Donald joined our group and pivoted us back to more of a pyro front end. That's where we've been building lots of expertise on how we get raw nodules into those intermediate products. And the plan is to build the pyro in Brownsville. If we were to go down that pathway, we're very fortunate that we have an amazing technical partner in Japan that we continue to have a great working relationship with.

And the boy, a nickel refinery and nickel processing plant hasn't been built in 80 years yet here in America, yet the demand for nickel is going at an increasing clip. We know it's needed to make every ton of famous steel. We know it's used in super alloys. We know it's used across AI and data centers and military uses and electrification. And so the uses and the demand for it is going up, yet we import 100% of our nickel. So something is not kind of a fit there so there's an opportunity, I guess. And we just see that this might be that moment where the administration says, yes, we want to fix that problem.

Yes. No, for sure. That's why I was kind of asking, it seems like a pretty exciting turn and I would love to see the numbers on that. More on that, just switching off the processing back to the recovery. you said you're sort of getting along any time items, I'm assuming for hidden gem or the whole -- that whole process. So what would you anticipate, assuming your permit within 12 months what would you anticipate the timing to get Hinge back on the water? And do you foresee it being as is or additional collector capacity?

Yes. We are still standing by our guidance of commissioning Q4 next year. And it will -- we've elected to run with a 2 collector model. And so that is -- basically gives us the opportunity to get out on the water I guess that will be early '28. And we'll kick off with 1 colette in production, but we'll soon move to a second collecting in production as well. And so as you well know, we have a production boat that is production-ready now, just not a production number that's not high enough. And so we want to see a higher production number because the more tonnes you amortize over the cost of the floating steel above, the better the economics. And I think we proved in 2022 that we can do this providably at commercial scale. So now it's about making money.

It's important to note, Matt, to the connective tissue for the ramp-up offshore, but then also what the potential processing and refining plans might be onshore. Certainly, this administration wants to be able to say, if we can bring this back domestically, it's helpful to be able to do it during this administration. And the way you do that is ramp up in relatively bite-sized amounts starting, let's say, with production capacity that could handle nodules coming from a vessel like the hidden gem, which has 3 million tons per annum nominal capacity.

So kind of matching as best we can ramp up for both the offshore production and then having a home for the processing refining of those nodules is certainly part of the work that we and our team of engineers are doing in the coming months.

Right. And if I may just ask 1 more question. On the permitting process, not so much the process, you've made that pretty clear. One of the -- under the NOAA process, there is an additional piece of ground that wasn't covered by the PFS. It wasn't covered by the initial assessment that you've added. I'm just curious sort of why and what your plans are for that? I mean can you really do any work on that in the near term? And is it infringing on anyone else's claims that might be under the previous permit regime?

Yes. Look, it was just a natural fit. It was bidding between two blocks that we had hold over. And at the end of the day, we will -- while we're out there, continue to take observations of that. And I guess, what we'll aim to prove it's a continuous piece of ground, and it doesn't require any particular environmental work done on it. And so -- and we imagine that once production starts out there that there'll be more collaboration between some of the license holders as well.

And I think no doubt, there will be some people that end up being granted licenses who don't have production vessels and all who want help getting their applications through the permitting process. And as you know, we probably know more about that than anyone on this planet. And we're certainly getting a lot of inbound into how we might be willing to collaborate with some players. And I -- and we see this as preproduction. I think it's -- we want to see more people in production out there. But what I'm pretty certain no one is planning to do is to put plans for a processing plant on the ground anywhere.

I see a lot of applicants starting to talk about them being successful at moving to the first phase. We know from that journey, there's a lot of road left in front of them. and we'll be here to help them and maybe supply services to them along the way. And -- but in the meantime, to fully explore just how committed this administration is to bringing a processing plant so we can bring nodule straight to the USA.

I think we're going to -- Michelle take a few questions potentially from our chat. So there's a question from Jakob Stefanski. We mentioned government supports needed for the U.S.-based processing plant. And can we clarify we'll try to support this means financial permitting or otherwise. .

It's a good question, and I think the answer is all of the above. Certainly, as we noted earlier, progressing the commercial recovery permit is the most important prerequisite. We also, of course, would rely upon both at the federal state and local levels, what we think are very supportive administrations to help really make some of these plans a reality.

But again, the prerequisite for a lot of this work is site-specific feasibility work. So ensuring that we get that right and are doing it at a place like the Port Brownsville, where we have truly everything that we need to stand up a potential nodular ecosystem that's going to be critical in our decision to push forward on this.

And we do have really the unique ability with this resource of maintaining capital-light options for the processing. So it's not like most ore bodies where you have no choice but to build processing and refining close to where the ore body is. We have flexibility here in the nature of this natural resource and that you can collect them and ship them really north, south east or west. But it's the desire of this administration position to change the game and kind of release themselves from the stranglehold that China has had on the critical metals, and to do that, as Gerard noted, it's not just a TMC story. So we have the resource and we have the capability to help do this.

But we're making all of the decisions obviously, with the benefit of our shareholders in mind and making sure that we are not pushing forward on anything without a very nondilutive financing plan that we expect would be supported by the government, assuming that -- and I see 1 more question on the hidden gem. -- looking at sort of the investment or acquisition of the second vessel like the hidden gem, what would be planned before that, who might manufacture it? Who would the parts be on that front?

Well, taking a converted drillship and making it fit for picking up modules proved to be a pretty efficient move, and there's an abundance of those vessels. I saw Transocean recently scrapped four of them or for quite cheap money. And so that's an option.

And we are -- we do have inbound inquiries from people who have vessels who would like to to use them. Of course, the vessel is the first step. The operator is the important one. And just to be clear, Allseas want to operate more vessels in the CCZ, and we want them to operate more vessels for us in this area. And so -- and obviously, there are efficiencies in having similar type vessels from a part, from an administration perspective and so standby .

Operator, any other questions on the phone line? .

I'm showing no further questions on the phone lines.

Okay. Gerard, perhaps over to you. .

Yes, yes. Well, thank you, everyone. We've got a lot of very long-term shareholders who have been supporting us since go public in 2021. And of course, before that, when we were deepening. And it's exciting to see the direction the business is heading. It was exciting to report some of those updates today. It's frustrating not being able to give more regular updates that we have to be very sensitive in how we message that to the team and our partners. Thank you for an enormous heavy lift from everyone who works at TMC. It's a very dedicated, hard-working team, and it's an honor to work alongside you all.

And to our shareholders, thank you for being there and coming with us on this journey and look forward to keeping you updated as updates become available over.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

Thank you for standing by, and welcome to The Metals Company's Third Quarter 2025 Earnings Conference Call. [Operator Instructions].

I would now like to hand the call over to Craig Shesky, CFO. Please go ahead.

Thank you very much. Please note that during this call, certain statements made by the company will be forward-looking and based on management's beliefs and assumptions from the information available at this time. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control.

Additionally, please note that the company's actual results may differ materially from those anticipated and except as required by law, we undertake no obligation to update any forward-looking statement. Our remarks today may also include non-GAAP financial measures, including with respect to free cash flows and additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide deck being used with this call. And as always, you're welcome to follow along with our slide deck or if joining by phone. You can access it at any time at investors.metals.co.

And I'll now turn the conference call over to our Chairman and CEO, Gerard Barron.

Thanks, Craig, and thanks to everyone for joining this call today. I'd also like to start our quarterly calls with a small bit of reflection. After so much news this year, it's hard to believe that it's just over 7 months since we announced our pivot to the United States. And since then, we have seen President Trump's executive order to support this industry. We've launched 3 applications with NOAA including the first-ever application for a commercial recovery permit.

We've seen new investment flow in from Korea Zinc to Hess family and even more investment from our partner, Alsea. And as outlined during our Strategy Day in August, we have published 2 SEC compliant technical reports showing a total resource value of more than $23 billion. All the while, progress with our new regulator, NOAA has continued, and the tailwinds for critical minerals from both public and private capital providers have only become more clear. And yet, I'm sure many of you are chomping at the bit for more news. And I don't blame you.

Yes, we've been relatively quiet in our messaging over the last couple of months. but please don't take that as a sign that things are slow around here, like the contrary. And beneath the calm surface, our feeder pedaling faster than ever, and I am very eager to share more color when the time is right. But let me summarize where we are right now. We continue to feel confident that our U.S. pivot will lead to a commercial recovery permit in 2027.

And our regular discussions with NOAA and the U.S. government are productive, and we believe that the directors in April executive order will be delivered upon, including the recent reports of NOAA's streamlined application review process sent to the White House. And given our robust cash position, I can assure you that we have no need anytime soon to tap the public capital markets. We're in an excellent liquidity and capital position with approximately $165 million of liquidity today, inclusive of our recent warrant exercises and over $50 million of potential additional proceeds from in-the-money warrants.

This does in fact to the potential $48 million proceeds from the Korea Zinc warrants at a $7 strike bras, Nauru SOAC business combination warrants at 1150, Nauru warrants, hello sponsoring states -- we see a pathway for more than $400 million of incoming cash from warrant exercise. Certainly, we and our partners have plenty of work to do as we prepare for a commercial production targeted for the fourth quarter of 2027. And we have a strategy in place to ensure we can do so in a shareholder-friendly fashion. But let's start today by highlighting the problem that we're looking to solve for the United States and remind ourselves why this remains such a critical resource.

Today, America is critically dependent on foreign sources for the very metals that at once dominated in the late 19th through to the mid-20th centuries for manganese, cobalt and nickel, American now imports roughly 100%. Even copper is nearly half important. And just this month, copper joined the other 3 metals on the critical mineral list published by the U.S. Geological Survey. So this is a major strategic risk. We're not just talking about metals, we're talking about national security, energy independence and industrial resilience.

Our resource of 1 billion tonnes of nodules can fundamentally transform the United States, offering not just mineral independence but strategic dominance in 3 metals. Based on today's level of American consumption, it could supply 300 years of manganese and 200 years of Cobalt and almost a century of nickel. And through public-private partnerships, the administration is clearly taking steps to solve vulnerabilities in rare earths and lithium, base metals and beyond.

Major financial institutions are also following suit. And we believe that for nickel, cobalt and manganese in particular, our nodule resource provides the most scalable and economically viable solution for our reindustrialization in the U.S. And it's clear that the U.S. sees seafloor resources as a key part of a broader solution. Just last week, the United States and Japan announced a landmark partnership to develop rare earth minerals from 3, 4months around Minimatory Island. A framework signed during President Trump's recent visit to Tokyo. And Japan will now begin preparations to test the feasibility of lifting rare earth models as early as January 2026.

And with larger-scale test many anticipated 1 year later. Separately, we're also pleased to announce that [ Altis ] hidden gem vessel will play a key part in Japanese nodule collection trials alongside the University of Tokyo. The hidden gem will head to Japan's exclusive economic zone near inventory Island to conduct a new nodule collection pilot in early January 2027. And this represents the perfect opportunity to test our own technical readiness and some of the planned upgrades to the mining equipment while also helping the Japanese advance their own industry.

Together with all [indiscernible], we also see this as a a very good commercial opportunity, whilst we await the NOAA payments to be issued. So the U.S. government shutdown slowed progress on NOAA's review of our applications over the course of several weeks. But with the government returning to work, our applications will once again continue to systematically move through no regulatory process. In fact, NOAA confirmed to us earlier today that they are back at work and again, focused on these applications. And as a reminder, NOAA has confirmed that both the exploration applications were fully compliant, and our exploration applications are currently in the certification stage, which involves an interagency review of the applications.

Following certification and Environmental Impact Statement, or EIS, is expected to be prepared under NEPA, and a public comment period will be provided and following the public comment period, NOAA will determine whether to issue the requested licenses and permit and if so, under what terms and conditions.

In July 2025, NOAA issued proposed amendments to its regulations on the dish. And the proposed regulation introduces a new consolidated application procedure allowing Africans to submit a single application for both an exploration license and a commercial recovery permit.

And these changes are intended to modernize and streamline the permitting process under DSHMRA implementing regulations. The public comment period closed on September 5, 2025. And on October 29, it was reported that NOAA had sent the proposed regulations to the White House for approval.

Over the past week, our regulatory and environmental teams attended the underwater Mineral Conference in Florida. And during this event, former long-time ISA Secretary General gave a tremendous speech, which provided some important context on the U.S. seabed mining regulations. Bottom line, in his eyes, the U.S. position has been legally consistent for decades and no regulations from the 1980s actually form the basis for the ISA exploration regulations.

And of course, this is firmly in line with the conclusions of TMC, our counsel and the United States government. DSHMRA and the NOAA implementing regulations are clear, effective sophisticated and enforceable.

Next week, Craig will be presenting at the Benchmark Week Conference in LA and Michael Lorena representative from the U.S. Department of Interior regarding seafloor Resources He'll also be meeting with automakers, battery makers and investors as our path to production has never been more clear.

On that note, I'll turn it over to Craig to walk through some project updates and the financials. Over to you, Craig.

Thanks, Gerard. So before getting into the economics and financials, it's worthwhile to take a step back and recognize the myriad world first that this company has already achieved alongside our partners. The TMC has now produced the first SEC and Canadian compliant resource statements, the first PFS for an agile project and the first reserves for a Nagel project.

We've achieved the first production of most of the metal products that we intend to produce with significant flexibility based on market conditions and customer needs. We built on decades of environmental research pioneered originally by our regulator, NOAA, including the largest DTC data set ever produced.

In 2022, we and our partner also achieved the first integrated pilot mining test since the 1970s, lifting over 3,000 tons of nodules to the surface. And of course, we're building on the work of many pioneering U.S. companies back in the 1970s. So nearly 50 years ago, when this industry first took shape, U.S. companies tested a range of technologies to collect nodules. These early pioneers understood the challenges and given the technology available at the time, their decisions were very sensible.

Lacking today's advanced buoyancy systems, engineers, feared heavy track vehicles might get bogged down in soft sediment. The Ocean Minerals Company, therefore, developed an Archimedes group of propelled miner that relied on deepsea sentiment sinkage for traction. It's rotating collector head with hooked teeth gathered nodules effectively, but without the height adjustment in ingested excess sentiment and struggle [indiscernible] uneven terrain.

Inside, crushing nodules proved very problematic. As sediment and fines repeatedly clogged the mechanism. And with only a nascent understanding of the Pelagic communities, sentiment Latin water was discharged at the surface into the ocean's most biologically productive zone.

Fast forward 50 years, and we can see clear benefits of partnering with the company that made its name pioneering the development of offshore oil and gas. With over 250 engineers working on the project, all sees based engineering decisions on decades' worth of environmental data, resulting in a system designed from the sea floor up to deliver minimize -- excuse me, to minimize impact while also delivering maximum pickup efficiency.

And that principle is evident in 5 key innovations. Our Coanda nozzle refined through modern modeling and real-time height adjustment dramatically reduced sentiment intake. Inside the vehicle, differential flow in countercurrent washing clear nearly all sediment from the nodules, while advanced derivative users keep the sediment plum localized and predictable. Where early Pioneer struggled to keep collectors from sinking.

Our challenge was the opposite. Advanced buoyancy allows our collector to move gently across the sea floor, spreading its weight evenly and leaving only paint centimeter ripples, not the 80-centimeter furrows of older systems. And rather than just discharging separated sentiment at the surface, we plan on returning it at 2,000 meters, following independent advice for researchers at the University of Hawaii, a decision that avoids overlap with most marine life.

Make no mistake, what was achieved by those early pioneers as monumental. But after decades of innovation, this is not the 1970s version of Deepsea mining. It's smarter, it's lighter impact and it's a more responsible approach. Let's move onshore. For over a decade, we've undertaken a rigorous onshore testing program to prove out the various processes to unlock the value and strategic potential of this enormous resource. From bench-scale lab testing of single-digit kilo samples to commercial scale processing on 2,000 ton batches on existing plant lines.

We now know that we can take our nodules from seafloor to high-value products in various formats to support a variety of industries. And recently, we delivered another industry first, the successful conversion of nodule derived manganese silicate into battery-grade manganese sulfate.

This is a very important milestone for 2 reasons: First, it demonstrates that our natural resource can produce 3 key metals in sulfate form, nickel, cobalt and now manganese, using an conventional hydrometallurgical route.

Second, with this achievement, TMC USA now is a clear pathway to produce every feedstock required for precursor cathode active materials or PCAM including for the manganese rich chemistries that major U.S. automakers are moving toward their next-generation EV platforms. This work was done using nodule derived manganese silicate refined at Kingston process Metallurgy's operating facility in Ontario, further validating the flow sheet we've designed and the scalability of our partner's technology.

And importantly, this now extends our track record of nodule derived first, nickel sulfate, cobalt sulfate, manganese sulfate reinforcing that the resource is real, the chemistry works and the technical risks continue to come down.

Now this hard one portfolio of innovation means that TMC is the world leader in nodule project development, and it leaves us in the pole position to kick-start an entire industrial ecosystem around this resource.

Our extensive investment in scientific research gives us the most comprehensive deep-sea data set ever compiled, making this data available to NOAA will enable updates to the programmatic environmental impact statement, which has not been refreshed since 1980 and will materially reduce the burden for every other U.S. company that might operate in the clearing Clipperton zone.

On the processing front, our proven flow sheet opens the door to take clearing Clipper and zone modules and turn them into high-value products. And this means real offtake potential and optionality for future American refining capacity as laid out in our prefeasibility study.

In collection technology, our scale positions us to accelerate a broader domestic supply chain from riser systems and dewatering units to subsea equipment and discrete nodule pickers. Operationally, we see clear opportunities to share vessels, assets and methodology with other players.

And finally, in survey technology, we're already working with U.S. AUV, ROV, buoy and subsea battery developers, and we've committed to NOAA that our offshore campaigns can support third-party tech testing. This is how you build a new industry by creating an ecosystem, not just a single project. And as many of you know, our Strategy Day in New York talks quite a bit about this first project, our pre-feasibility study and initial assessments, which had 2 documents including sign-off from qualified persons showing a combined project net present value of $23.6 billion, while also showing a clear capital-efficient path to first production.

And again, the PFS also included a world first, reserves for nonprofit. Just a quick reminder on the geographical areas that each study covers.

The PFS covers the area known as Nord here seen on this slide in dark blue and the initial assessment covers everything else. But keep in mind that neither study covers the additional ground that we've applied for under the U.S. law, where we now have priority right. Just a quick reminder of some of the economics, we expect to generate almost $600 per dry ton of nodules during steady-state production, defined as our average production from 2031 through 2043.

Overall, the revenue mix is expected to be very similar to what we shared with the market over the last several years, 45% of revenue from nickel products, 28% from manganese, 17% from copper and 9% cobalt being the smallest source of revenue. With our steady-state revenue per dry ton of nearly $600 and OpEx per ton of about $340, we arrived at our EBITDA margin per tonne expected to be about 43% or $250 per dry ton during steady-state years between 2031 and 2043. So again, adding up the NPV of the $18.1 billion for the initial assessment and $5.5 billion for the PFS. We arrived at a total estimated resource NPV of $23.6 billion.

And over the life of both projects on an undiscounted basis, revenue of approximately $369 billion EBITDA in excess of $200 billion and a position in the first quartile of the cost curve. And yet, despite the quality and size of the resource, we remain undervalued in our opinion compared to peer developers, explorers and significantly undervalued compared to producers.

On the left side of this page, this will be familiar to some of you who attended our Strategy Day and listened to our last quarterly call, we'll provide a TMC valuation example for illustrative purposes only. Using a slight premium to the upper end of the nickel developer and explorer valuations applied to our PFS NPV and then adding in the average of nickel developer and Explorer valuations for the initial assessment. We can see a path for a total illustrative market value based on comps of approximately $10 billion or over $20 a share.

So from there, you can see on the right side of the page, what a nickel or copper producer we trade that as a multiple of NAV, showing the potential for multiple expansion as our path to production approaches and begins.

So on to the financial results for the quarter. In the third quarter of 2025, TMC reported a net loss of $184.5 million or $0.46 per share compared to a net loss of $20.5 million or $0.06 per share for the same period in 2024. The net loss for the third quarter include exploration and evaluation expenses of $9.6 million versus $11.8 million in Q3 2024. G&A expenses of $45.7 million versus $8.1 million in Q3 2024 and other items of $129.2 million.

Exploration and evaluation expenses decreased by $2.2 million in the third quarter of 2025 compared to the same period in 2024. General and administration expenses increased by $37.6 million in the third quarter of 2025 compared to the third quarter of 2024, mainly due to an increase in share-based compensation of $35 million as a result of amortization of the fair value of retention grants, restricted stock units and options granted to directors and consultants in the third quarter, and an increase of $2 million in professional and consulting fees, primarily relating to the company pursuing our U.S. regulatory route.

Other significant items impacting the net loss in the third quarter and the most significant is the change in the fair value of the royalty liability plus Tonga warrant costs and the change in the fair value and gain on dilution of our investment in the LCR transaction. So a bit of additional context on those valuations. Following the company is filing of our PFS on the Nord project in August of 2025.

The fair value of the royalty liability for NORI-D was valued at $130 million as at September 30, using an income approach while for Nora Areas AC, a market approach was used resulting in a fair value of $15 million. The resulting royalty liability fair value of NORI-Area D totals $145 million, and therefore, an increase of $131 million in the third quarter of 2025, which is a nonoperating noncash expense.

The ton to warrant cost of $5 million represents the fair value of warrants issued to the Tonga Minerals Authority as part of a revised sponsorship agreement. The change in the fair value warrant liability resulted from a decrease in the price of the company's shares and the price of our public warrants during the third quarter of 2025.

The free cash flow for the third quarter of 2025 was negative 11.5 million compared to negative $5.9 million in the third quarter of 2024, primarily due to higher environmental personnel and corporate payments. This is partially offset by interest earned on a higher cash balance in 2025 and and higher payments to campaign 8 vendors made in the comparative period.

Free cash flow is a non-GAAP measure, and I would encourage you to look at the appendix for that non-GAAP reconciliation table. We believe, as Gerard stated, that our cash on hand is more than sufficient to meet our working capital and CapEx requirements for at least the next 12 months from today. And our accounts payable and accrued liability balance at September 30 was $46.8 million, which includes 32.9 million [indiscernible] for various services provided, the majority of which could be settled in equity at TMC's election.

So operator, we'd now like to open up the call for Q&A.

[Operator Instructions] Our first question comes from the line of Dmitry Silversteyn of Water Tower Research.

I just want to clarify 1 thing. I think I missed it when Gary was talking about potential incoming cash if all of the warrants are exercised. Can you repeat what that number was?

Yes. Well, I'll leave you, Craig.

Yes. So the total potential proceeds, excluding some that were exercised over the course of Q3 and in October total potential additional proceeds would be over $432 million, the majority of which would be the $11.50 strike price public and private warrants from the SOC deep green business combination, and those have an expiration date of September 2026.

There's also some nuance to metro because there are certain warrants and there's half a dozen categories outstanding certain warrants where they may have cash flows exercise. But overall, there's a very significant potential inflow of cash and what we would view to be interesting exercise prices. So the point being, we do have a very strong liquidity position today at $165 million.

There's over $50 million of warrant proceeds that could come from in the money warrants and then quite a bit more beyond that.

Understood. And then I was excited to hear you guys are sending hidden gem off to Japan. Understanding international relationships and helping out with diplomacy, is this a pro bono work for you? Or are you going to be getting paid for the exploration that you help the Japanese do.

Certainly not proven. And -- but all seas, we didn't step in the middle of that. All sees will have a direct contract with the foundation that is funding that program. TMC will also get some financial benefit out of that as well. But yes, certainly not proven.

Understood, Gerard. And then final question. You mentioned that NOAA is adjusting -- it's streamlining its regulation process in combining exploration and commercial exploitation licenses. How exactly would that work? In other words, does gating and exploration license basically, you have to have a commercial project in place? I mean why would you combine those 2 license? And how would that work in your case specifically?

Well, that's -- today, if you read the regulations, you have to have an exploration license before they'll consider a commercial recovery comment. That's impractical in our case because we are slightly unique case. And in fact, I'd say we're the only company in the world who has an already prepared commercial recovery permit application with all of the substantiating data.

And so that meant that from NOAA perspective, like we've already got an exploration license, it's with the ISA. So we'd like you to sell work on the commercial recovery permit straight away. And they're like, yes, we want to start work on that as well. but we do need to change the regs to allow for that. And so it's a little bit of tidy up because it was never anticipated when they put these rigs in place in 1980, that an applicant would have already done that work -- so they're just making good with the current circumstances. So it's a very good opportunity for us.

[Operator Instructions].

I think in the [indiscernible] we'll take 1 from the webcast from Jakob Stefanski. Will the exploration permit be granted at the same time as the production permit. If not, when is the exploration permit anticipated to be approved. Without getting into specific dates, I think it's worth noting that implicit in our Q4 2027 production start time, the granted this permit, the commercial recovery permit, is no longer the critical path, given that TMC and Allseas agree that there is sufficient regulatory certainty provided by the U.S. process that we can get ourselves ready to go on the Hinge vessel and even begin soon ordering some longer lead time items.

So while there is a possibility of the streamlined and consolidated exploration license and commercial recovery permit process, accelerating the potential grant of both, even if this path were to be sequential first exploration license than commercial recovery permit, that is all still consistent with the Q4 2027 production start date. So we'll provide more data as we continue down the NOAA path. But again, as noted, it was very heartening to see that they were working during the shutdown on the consolidated process and now back at their desks full time.

Thank you. As I show no further questions. I would now like to turn the conference back to Gerard Barron for closing remarks.

You know what, we'll see if we might take another couple if you populate the webcast. So if others have questions, feel free to drop in the chat. There is a question about why do we call it mining instead of the more potable word harvesting, Duly noted John Alman, sometimes we refer to it as collection as opposed to mining, but we feel very confident that the terminology here, when people actually look at what's being done on the sea floor is certainly very different than traditional land-based mining. So we'll take that on board.

We also see a question from James Silke. The PFS explains an approach of processing that product through capital light at existing facilities in the Eastern Hemisphere. But it also assumes that by year 10 of production, we are bringing some refining capacity to the United States. So Gerard, just kind of an overall question, what opportunities do we see available for funding and permitting and construction of such facilities at scale within the United States.

A little comment for you, James, too. I mean, we do note the refining capacity that's implicit in the prefeasibility study and then additional assumptions made for the initial assessment, most of that is focused on spending in the 2030s and beyond. But obviously, look, the U.S. has a major gap when it comes to certain metals and TMC is fortunate to have not only the expertise here, but the ability to be flexible on what product formats might be.

And I think we've demonstrated that with the world first production of manganese sulfate from the nodule derived intermediate manganese silica product. So I think our overall message is we've put out our PFS and our initial assessment and those assumptions are quite clear in those documents. But there is flexibility that we have through this unique nodule resource and -- that puts us in a very good position when talking about capital providers, whether it's through the U.S. government or the private markets.

And I still show no questions from the phone lines.

Well, thank you, everyone, for attending today's call. And we have an exciting run in to the end of the year. Craig is off to benchmark conference. I'm off to D.C. and we're happy the government's back to work, and we'll be sure to keep you updated on exciting developments. If not, we'll chat to you on our next quarter.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.